The Supreme Court handed down its highly anticipated judgment back in July of this year in the long running, landmark case of Standish v Standish. The judgment provided clarity for family law professionals and provides further guidance as to how non-matrimonial assets are treated in high-value divorces in England and Wales, and in particular around how non matrimonial assets are treated under the sharing principle in financial remedy proceedings.
Case background
Mr and Mrs Standish’s marriage lasted 15 years. Mr Standish had accumulated a significant amount of wealth prior to marriage. As part of a tax and planning arrangement, Mr Standish transferred £77 million to Mrs Standish to be held in a trust for their children. However, divorce proceedings were issued by Mrs Standish before the trust was set up. At the time of separation, there were a total of £132 million in marital assets and Mrs Standish argued the £77 million was gifted to her and should be subject to the sharing principle. Subsequently, Mr Standish argued the funds had been acquired before the marriage and should be omitted from the settlement.
Previous judgment
The first instance Judge found assets were matrimonialised property and should be subject to the sharing principle. The Judge found £112 million was matrimonial property which lead to Mrs Standish being awarded £45 million. Both parties appealed the decision and the Court of Appeal sided with Mr Standish by reducing Mrs Standish’s award to £20 million. Consequently, Mrs Standish appealed this decision of the court.
Supreme Court ruling
On the 2nd July, the Supreme Court dismissed Mrs Standish’s appeal and found the assets were not considered as matrimonial property and therefore they were not subject to the sharing principle.
When the court handed down it’s judgment, the court established that the sharing principle applies only to matrimonial property which consists of assets generated through the efforts of both parties throughout the marriage.
The court ruled that the way in which the parties had been dealing with the asset and whether they treated the asset as shared between them was significant. It was established for an asset to be matrimonialised the parties must treat the asset as being shared.
The court confirmed that the transfer of £77 million to Mrs Standish was made for the purpose of tax planning arrangements and did not demonstrate evidence of the asset being shared between the parties. Therefore, it had not been matrimonialised.
This recent development will bear significant impact in financial remedy proceedings, particularly when it comes to the distinction between matrimonial and non-matrimonial assets and the sharing principle.
It is important to note, following this ruling, a party requiring a share of non-matrimonial assets will need to produce evidence to demonstrate that there has been an intention between the parties to share the assets and further such assets assets have been treated as shared during the marriage.
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If you are considering entering into a marriage or a civil partnership, or if you are wanting to protect assets and you are already married/ in a civil partnership, you should consider speaking with a family lawyer who can advise you on the options in respect of agreements you may want to consider entering into to protect your financial position.
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