Divorces involving high-value assets are rarely straightforward. A recent judgment from the UK Supreme Court has provided much-needed clarity on how such assets are treated when they are transferred between spouses — particularly when the transfer is motivated by tax planning rather than mutual ownership.

The Background: Standish v Standish

This case involved a long-running financial dispute between a husband (aged 72) and wife (aged 57), married since 2005 and parents to two children. The husband had built significant personal wealth through a successful career in financial services. The couple lived in Switzerland for much of their marriage.

In 2017, the husband transferred a portfolio of investments — worth approximately £80 million — into his wife’s name. The aim? To enable her to establish trusts for their children as part of an inheritance tax mitigation strategy. However, the trusts were never created, and the wife retained the assets in her name.

When the marriage broke down in 2020, the classification of those assets became a central issue in the divorce proceedings.

The Legal Journey

At first instance, the High Court accepted that the assets were originally non-matrimonial property (NMP), as they had been accrued by the husband prior to the marriage. However, the judge ruled that the 2017 transfer had “matrimonialised” the assets, bringing them within the pool for division — though not equally. The judge awarded the husband 60% and the wife 40%.

Both parties appealed. The Court of Appeal sided with the husband, concluding that only 25% of the assets were genuinely matrimonial property (MP) — subject to the sharing principle — while the remaining 75% remained NMP. Accordingly, the husband’s award was increased to 75%. The wife then appealed to the Supreme Court.

The Supreme Court’s Verdict

The Supreme Court dismissed the wife’s appeal and upheld the Court of Appeal’s reasoning. The key takeaway? Transferring assets between spouses — especially for tax planning purposes — does not automatically change their legal character.

The Court reinforced the important distinction between:

• Matrimonial property: assets built up during the marriage through joint efforts or intended to be shared; and
• Non-matrimonial property: assets acquired before the marriage or through individual means, such as inheritance or personal business ventures.

In this case, the transfer of assets was not seen as a gesture of shared ownership, but a tax-efficient move. As such, the majority of the assets retained their non-matrimonial status.

Why This Matters

This ruling has significant implications for divorces involving substantial wealth. It confirms that not all inter-spousal transfers during a marriage will be treated as creating shared, matrimonial property. The purpose and context of the transfer are crucial.

For individuals navigating high-net-worth separations, this case serves as a reminder: just because an asset is held in one spouse’s name — or transferred between spouses — doesn’t automatically mean it will be split in a divorce. Intent and origin matter.