Supreme Court Clarifies Sharing Principle in Highly Anticipated Matrimonial Dispute

Supreme Court Clarifies Sharing Principle in Highly Anticipated Matrimonial Dispute

The Supreme Court has ruled that non-matrimonial assets transferred for tax planning purposes are not subject to the ‘sharing principle’ in divorce, in a landmark judgement that is expected to influence the future of high-net worth settlements. 

In a widely anticipated decision, the court unanimously dismissed an appeal by Anna Standish, who had sought after a larger share of the £77.8 million transferred to her by her husband, Clive Standish during their marriage. 

The ruling confirms that non-matrimonial property which is not treated as shared during the relationship is not eligible for division under the sharing principle. 

The ruling is expected to reshape the boundaries of financial remedy proceedings, particularly for cases involving inherited or family wealth, and could lead to a rise in pre- and postnuptial agreements. 

Background to the Case 

The dispute centred on assets transferred by Clive Standish to his wife in 2017 as part of a tax planning scheme designed to reduce inheritance tax. The couple separated in 2020 and subsequently entered financial remedy proceedings. 

At first instance, the trial judge found the assets to be matrimonial property and awarded Mrs Standish £45 million – a 60/40 division in favour of Mr Standish. However, the Court of Appeal reversed the ruling, finding that at least 75% of the 2017 assets were non-matrimonial, and reduced Mrs Standish’s award to £25 million. 

Mrs’ Standish appealed the ruling to the Supreme Court, arguing that the assets had become part of the marital partnership and should be subject to division. 

Supreme Court Ruling: Tax Planning Assets Were Not Shared 

Lord Burrows and Lord Stephens delivered the lead judgement, finding that the 2017 assets were never treated by the couple as shared. They were transferred solely to benefit their children and for the purpose of inheritance tax mitigation. The judgment said: 

“There is nothing to show that, over time, the parties were treating the 2017 assets as shared between them. 

“The transfer was in pursuance of a scheme to negate inheritance tax and it was for the benefit exclusively of the children.” 

The Court concluded that there was “no matrimonialisation” of the transferred assets, reaffirming that the sharing principle does not apply to non-matrimonial property unless there is clear evidence of mutual intention to share. 

What does the Legal Industry Think? 

The Supreme Court upheld the Court of Appeal’s decision and provided what it described as “essential guidance” on when and how non-matrimonial property might become part of the marital estate. 

“This guidance will give the courts a clear framework to ensure individuals cannot benefit from running false arguments as to whether they had or had not agreed to share certain assets,” said Sam Longworth, partner at Stewarts, who represented Mr Standish. 

Aasha Choudhary, family law partner at Shakespeare Martineau, said the decision “marks a significant narrowing of the concept of ‘matrimonialisation’.” 

“Most crucially, this ruling makes it clear that if couples want a non-matrimonial asset to become shared property, it must be recorded clearly. Without that, the default position may now lean toward such assets remaining non-matrimonial — a major shift in the legal landscape,” she added. 

The judgment is considered one of the most significant rulings on non-matrimonial property in recent years and clarifies the limits of asset division on divorce. It is likely to influence legal strategy and negotiations in future high-value separations.  

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