The Supreme Court has dismissed an appeal over the ownership of £80m held by a divorcing couple, finding the sharing principle does not apply to non-matrimonial property.
Clive Standish argued the £77.8m which he transferred in 2017 to Anna Standish as part of a tax planning scheme were his non-matrimonial property. The couple’s marriage ended in 2020. In subsequent financial remedy proceedings, the judge found those assets were matrimonial property and divided them 60/40 in the husband’s favour. Anna Standish was awarded £45m.
The Court of Appeal subsequently ruled that at least 75% of the 2017 assets were not matrimonial and reduced the wife’s award to £25m. Anna Standish appealed to the Supreme Court in a case widely watched by private client lawyers.
In lead judgment today, Lord Burrows and Lord Stephens, with whom Lord Reed, Lord Lloyd Jones, and Lady Simler agreed, said that ‘the problem for the wife is that there is nothing to show that, over time, the parties were treating the 2017 assests as shared between them’.
The judgment added: ‘The transfer was in pursuance of a scheme to negate inheritance tax and it was for the benefit exclusively of the children.’ There was ‘no matrimonialisation’ of the assets because ‘the transfer was to save tax’ and ‘it was for the benefit of the children not the wife’. The money transferred in 2017 was ‘not being treated by the husband and wife for any period of time as an asset that was shared between them’.
The Court of Appeal was correct that none of the non-matrimonial proportion had been matrimonialised, the judgment said, adding that the 75% ‘remains non-matrimonial property and is not subject to the sharing principle’.
Upholding the decisions and order of the Court of Appeal and dismissing the wife’s appeal, the judgment said: ‘In this judgment, we have thought it important to clarify that the sharing principle does not apply to non-matrimonial property; and to explain what underpins matrimonialisation and precisely why it is inapplicable to the transfer of the 2017 assets in this case.’
Sam Longworth, divorce and family law partner at Stewarts and lead partner for Mr Standish, said: ‘We are very grateful for the speed at which the Supreme Court reached this unanimous decision to reject the appeal of Mrs Standish against the largest ever reduction by the Court of Appeal to a divorce award.
‘The Supreme Court has also provided essential guidance as to when assets which do not have an originating connection to the marriage partnership should be considered marital. 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 during the currency of their relationship.’
Yael Selig, a family law partner at London’s Osborne’s Law, predicted ‘a surge in enquiries about prenuptial and postnuptial agreements’. She added: ‘Whilst today’s judgment may offer some reassurance to wealthy individuals who fear being forced to carve up their assets if the marriage ends, a pre or post-nup remains the best possible way to protect their wealth.’
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.
Sarah Norman Scott, family law partner at Hodge Jones & Allen, said the judgment showed a ‘clear steer towards wealth preservation’. However Claire Reid, partner at Hall Brown Family Law, said the Supreme Court’s ruling was ‘effectively…goalposts being moved slightly rather than a paradigm shift’.
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