On 2nd July the Supreme Court delivered its landmark Judgment in Standish v Standish – affirming a husband’s £78 million transfer to his wife made in 2017 remains largely non-matrimonial property. The Court’s decision, dismissing the Wife’s appeal, upheld the Court of Appeal award of £25 million – a dramatic reduction to the initial £45 million award.
Facts
Pre divorce, Mr Standish transferred around £78 million to his wife specifically for the purposes of tax planning. Those funds had been accumulated by Mr Standish prior to the marriage, and he argued were therefore “non-matrimonial”. In the first trial of the divorce the Court deemed those assets to be “matrimonial” and they were divided 60:40 in husbands favour to reflect his contribution. The wife was awarded £45 million. Mr Standish appealed to the Court of Appeal where the Court held that the assets were not matrimonial and the wife’s award was therefore reduced to £25 million. The Wife appealed to the Supreme Court who have now dismissed that appeal.
Key Takeaways
- Distinction between matrimonial and non-matrimonial assets – matrimonial assets arise out of a couples joint efforts during marriage. Non-matrimonial assets originate before marriage or via gift / inheritance.
- Merely transferring assets to a spouse does not convert them into matrimonial property
- Assets may become matrimonial property (known as “matrimonialisation”) if they have been treated as shared over time but not just by transfer alone.
- The starting point for matrimonial property is that it should be shared on an equal basis. Non-matrimonial property can be shared to meet the needs of the parties.
Impact on clients
This Judgment provides clarification to divorcing couples on the issue of how assets will be viewed on divorce and reassures clients that assets acquired prior to the marriage can be ring-fenced. It will be important that those assets are not treated as shared during the marriage and clear evidence of intentions for any transfers should be documented.
It will be important for clients to take advice on asset transfers purely for tax or estate planning purposes. Properly drafted pre or post nuptial agreements can also be very helpful in resolving any uncertainty on the issue.
If you are concerned about preserving assets or understanding the issues above get in touch with our specialist team for further advice.
Disclaimer
This information is intended for general informational purposes only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0800 2800 421.
