How to protect your pre-marriage wealth - lessons from a landmark Supreme Court divorce judgment

In Standish v Standish [2025] UKSC 26, the Supreme Court has delivered a significant restatement of the principles governing the distinction between matrimonial and non-matrimonial property in financial remedy proceedings on divorce. The decision provides welcome clarification of the concept of “matrimonialisation” and its limits, particularly in the context of inter-spousal asset transfers for tax-planning purposes.

Background

The case concerned a wealthy couple with substantial assets, including around £80 million transferred by the husband to the wife in 2017. The transfer aimed to mitigate potential inheritance tax liabilities, exploiting the wife’s non-domiciled status to protect the assets for their children. Trust deeds were drafted, but the wife never actually established the proposed offshore trusts. When the marriage broke down shortly afterwards, the husband sought to argue that these assets, initially non-matrimonial and derived largely from his premarital wealth, should not be subject to the sharing principle.

In the High Court, Moor J held that the transfer had matrimonialised the assets, meaning they fell to be divided under the sharing principle, resulting in a significant award to the wife. The Court of Appeal overturned that decision, finding that the origin of the assets remained non-matrimonial and the transfer had not changed their character. The wife appealed to the Supreme Court.

The Supreme Court’s reasoning

The Supreme Court unanimously dismissed the wife’s appeal, upholding the Court of Appeal. Lords Burrows and Stephens (with whom Lord Reed, Lord Lloyd-Jones and Lady Simler agreed) delivered a joint judgment setting out clear principles:

• The sharing principle applies only to matrimonial property, not to non-matrimonial property (though non-matrimonial property may be subject to needs - or compensation-based claims).
• Matrimonialisation, where non-matrimonial assets become subject to sharing, requires more than a formal transfer: there must be evidence the parties treated the asset as a shared resource over time.
• Transfers undertaken purely for tax-planning purposes, especially those aimed at benefiting children, do not establish the intention to share those assets between spouses.

Applying these principles, the Supreme Court found that the 2017 transfer was driven solely by inheritance tax planning, with the wife holding the assets temporarily and ultimately intended to settle them in trust for the children. There was no evidence that the spouses treated those assets as a shared resource within the marriage, and therefore no basis to treat them as matrimonial property.

Implications

Standish v Standish represents a landmark restatement of the proper limits of matrimonialisation in English law, carrying persuasive weight for Cayman Islands courts applying similar principles. It confirms that inter-spousal transfers do not automatically transform the nature of non-matrimonial property, especially where there is a clear tax-planning or child-benefit motivation. The judgment will be particularly welcome for parties with substantial premarital wealth concerned about protecting non-matrimonial assets from equal sharing claims following a breakdown of the marriage.

For anyone considering marriage — or already married — this ruling is a powerful reminder of how to protect personal wealth:

• Keep clear records of the source of your assets.
• Document the intentions behind any transfers to your spouse.
• Consider a prenuptial or postnuptial agreement for added security.
• Take specialist legal advice if you are moving significant wealth between spouses, even for tax planning.

Conclusion

The Supreme Court’s decision in Standish draws a firm line: not all property becomes marital property simply because it changes hands within a marriage. Properly recorded intentions, sensible tax and estate planning, and timely legal advice can all help to safeguard hard-earned wealth.

If you want to ensure your financial position is secure — whether before, during, or after marriage — speak to a family law specialist today. Hampson and Company offers trusted, tailored advice on all aspects of family law, from financial settlements to complex asset protection. Our team is committed to helping you navigate divorce or relationship breakdown with confidence, clarity, and care.