Following a divorce or the dissolution of a civil partnership, the Court may be asked to decide how the parties’ property and finances should be divided if they cannot reach an agreement themselves. When dividing property in a divorce, the Court must apply the statutory criteria set out in section 25 of the Matrimonial Causes Act 1973 in order to arrive at a fair outcome.
The Court adopts a two-stage approach. Firstly, it must identify and calculate the value of the assets and, secondly, decide how those assets should be distributed. As part of that exercise, the Court must consider all the circumstances of the case and the factors set out in section 25. Lawyers increasingly look for ways in which they can exclude certain property from the application of the sharing principle in order to protect the assets of their client. This has led to a distinction between “matrimonial” and “non-matrimonial” assets. The Supreme Court recently made an important decision dealing with these issues. That decision was Standish v Standish [2025] UKSC 26.
What Happened in Standish v Standish?
The husband had accumulated significant wealth prior to the marriage. He then retired in 2007. The wife was a homemaker. In 2017, as part of tax planning, the husband transferred £77,000,000 to his wife with the intent of settling it into a trust for the children. However, the wife commenced divorce proceedings before any trust was established. By the time of the first Court hearing in 2022, the total value of the assets was £132,000,000, with the transferred 2017 assets worth approximately £80,000,000.
At first instance, the High Court classified £112,000,000 as matrimonial property, which included the 2017 assets and an £8,260,000 farming business, deeming these assets “matrimonialised” due to the transfer. As a result, the Court awarded 40% (£45,000,000) of the matrimonial property to the wife and 60% to the husband. The wife appealed, seeking £66,000,000.
The Court of Appeal decided that the source of the assets, not the title in which they were held, was a critical factor in determining whether the assets would be shared. The 2017 assets, having originated from the husband’s pre-marital wealth, remained non-matrimonial and should not be subject to the sharing principle simply because they were transferred into the wife’s name. In other words, the name in which the assets were held was not decisive. Instead, the source of the funds was the critical factor.
The Supreme Court’s Decision
On 2 July 2025, the Supreme Court gave its judgment following a further appeal.
In summary, Standish says the following:
- Non-matrimonial property is typically pre-marital property brought into the marriage by one party, or property acquired by one party from an external source such as a gift or inheritance.
- Matrimonial property is property that reflects the marriage partnership or is the product of the parties’ common endeavour.
- Which party has legal title to the property is not the deciding factor when determining whether it is matrimonial or non-matrimonial property.
- The sharing principle applies only to matrimonial property and not to non-matrimonial property.
- The starting point is that matrimonial property should be shared on an equal basis.
- What starts as non-matrimonial property may become matrimonial property through a process of “matrimonialisation”. The important factor is how the parties have been dealing with the asset and whether this shows that, over time, they have been treating the asset as shared between them. If they have treated the asset as shared, this may amount to matrimonialisation.
- The transfer of an asset between spouses will not, by itself, usually be sufficient to establish matrimonialisation.
How Should the Assets Be Divided?
It is important to appreciate that there are some exceptions to the general approach outlined above. For example, if one party to the marriage or civil partnership can demonstrate sufficient “need” for a non-matrimonial asset to be used, the Court can take it into account. In short, if one party can show that their needs exceed the available matrimonial assets, the Court can look to non-matrimonial property.
In any divorce or dissolution of a civil partnership, it is therefore imperative to identify the assets and determine whether they are matrimonial or non-matrimonial assets. Although non-matrimonial property is not automatically removed from consideration, it may be excluded from the application of the sharing principle and therefore from the assets to be divided equally between the parties.
What Is Considered When Dividing Property in a Divorce?
Differentiating matrimonial assets from non-matrimonial assets isn’t always straightforward.
Matrimonial property typically consists of assets accrued during the marriage or civil partnership. These assets result from the joint efforts of both parties. They include property built up together during the marriage or civil partnership.
Non-matrimonial property, on the other hand, is usually defined as assets received or created outside the span of the marriage or civil partnership. This can include property received without contribution from the other party and from an external source, such as an inheritance or gift. It also covers assets gained before the marriage or civil partnership, as well as those accumulated after separation.
However, the distinction does not provide a simple answer in every case. The nature of an asset, how the parties have treated it and whether it is required to meet either party’s needs may all be relevant. Every family’s financial circumstances are different, and understanding the likely approach in a particular case requires tailored advice from an experienced family solicitor.
A solicitor can help determine which assets the Court is likely to include when considering a financial settlement following a divorce or civil partnership dissolution. They can also advise on whether any assets could potentially be excluded from the application of the sharing principle.
If you require advice regarding your circumstances, please contact [email protected], call 0333 240 7373 or speak to one of our divorce solicitors.
About the Author
Sobiah Hussain is a Partner, Solicitor Advocate, Collaborative Law Practitioner and Head of Private Family Law at Reeds Solicitors. Sobiah advises on all aspects of family law, with particular expertise in dealing with divorce and matrimonial finance cases for high-net-worth clients and advising clients who require pre-nuptial or post-nuptial agreements and separation agreements for cohabiting couples.
