Share and share alike? Not necessarily says Supreme Court in key case on dividing assets in divorce

A new precedent creating firmer boundaries for dividing personal and shared assets after a marriage ends has been set by a landmark Supreme Court ruling.

The judges unanimously agreed that Clive Standish, who transferred investments of almost £78 million to his wife, Anna, as part of a tax planning scheme, does not have to split it equally with her as part of their divorce.

Dismissing an appeal by Mrs Standish, the court decided that the sharing principle does not apply to non-matrimonial property, largely because 75% of the £78 million had been earned by Mr Standish prior to the marriage.

The case, which is relevant to all divorcing couples (as well as those ending a civil partnership) and not just millionaires, is expected to increase demand for prenuptial and postnuptial agreements as a way of dividing and protecting assets in a way which reduces legal uncertainty.

• Wards Solicitors’ Family Law and Divorce Team specialise in financial and property agreements at the beginning, during or end of a relationship providing clear, fair and sensitive advice tailored to individual needs.

What is the background to this disputed matrimonial asset sharing case?

Mr and Mrs Standish married in 2005, a second marriage for both of them, and had two children together. The marriage broke down in 2020.

In 2017, Mr Standish transferred assets worth almost £78 million to his wife. Most of this wealth had been accrued during his successful career and his intention was that Mrs Standish would put the assets into trust for their children as part of a tax planning exercise.

However, Mrs Standish did not do this and remained the sole owner of the assets when legal action began.

The case turned on whether these assets, on divorce, were part of the ‘matrimonial property’ to be shared between them and if so, how this should be applied.

What did the courts look at in this matrimonial asset sharing case?

In financial remedy proceedings, the High Court initially split the family’s total wealth of £132 million 60/40 in Mr Standish’s favour awarding him £87 million and Mrs Standish, £45 million.

Mr Standish challenged this decision arguing that most of the money, including the assets transferred to Mrs Standish, was earned before they began living together.

The Court of Appeal agreed, ruling that at least 75% of the 2017 assets were not matrimonial and reducing Mrs Standish’s award to £25 million, reportedly the largest ever cut affecting a matrimonial award ordered by the English courts.

Mrs Standish then appealed to the Supreme Court which upheld the £25 million figure with the lead judges concluding: “In short, there was no matrimonialisation of the 2017 assets because, first, the transfer was to save tax, and, secondly, it was for the benefit of the children, not the wife.

“The 2017 assets were not, therefore, being treated by the husband and wife for any period of time as an asset that was shared between them.”

What does this ruling mean for divorcing couples?

This latest ruling confirms that only matrimonial assets – that is, the fruits of a marriage partnership – must be shared on divorce.

Representing a major shift in the law, non-matrimonial property, like Mr Standish’s £78 million, is not bound by this sharing principle but it may still be used to meet the other party’s or children’s financial needs.

This highlights the importance of recording during the marriage your intentions and how you want to treat marital and non-marital assets if the marriage breaks down.

Get in touch

It’s vitally important all couples considering divorce get independent legal advice before entering into an agreement with their spouse in relation to the division of assets.

We offer, where appropriate, a free initial half hour consultation to explain the divorce process clearly, outline all your options and help you make a plan going forward.

In addition, we have a range of divorce fixed fee packages we can discuss with you at your consultation.

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