Married couples who have separated and are proceeding with a divorce sometimes come across difficulties when dealing with the division of assets due to not knowing whether an asset is matrimonial or non-matrimonial. When parties continue to be in dispute, the court have the power to make orders to ensure a fair outcome. The Supreme Court have considered these issues within the case of Standish v Standish [2025] UKSC 26 where on 2nd July 2025 they handed down their judgment which confirms how the court deal with the same.
When considering financial matters, the court are concerned with all of the circumstances of the case as well as three principles of needs, compensation and sharing. The principle of needs where, if possible, the needs of the parties should be met. The principle of compensation, where one party has given up valuable earning opportunities by marrying, there should be compensation for that loss. Finally, the principle of sharing where the ‘marriage partnership’ should be shared with the starting point being an equal division.
The Supreme Court have determined the distinction between matrimonial and non-matrimonial property as being, generally, the source of the assets. For example, typically non-matrimonial property is property owned prior to the marriage, or property from an external factor, such as inheritance. Matrimonial property has been defined as property that comprises of the fruits of the ‘marriage partnership’, or reflects the marriage partnership, or is the product of the parties’ common endeavour.
The Supreme Court have made it clear for the first time that non-matrimonial property will not be considered within the sharing principle but will be considered as part of needs and compensation.
The Supreme Court have also determined that matrimonial property should normally be shared on an equal basis.
Finally, the Supreme Court set out that property can start as non-matrimonial property but can become matrimonial property through a process called “matrimonialisation”.
Matrimonialisation is accepted by the court as a useful term which effectively describes the transformation, and the court is mainly concerned whether this transformation has taken place or not, based on the facts of the case. The court shall consider how the parties have been dealing with the asset in question and whether this shows that over time they have been treating the asset as shared between them.
Consequently, this means that non-matrimonial property, such as inheritance, could go through a transformation resulting in it being matrimonial property. This could occur, for example, by cash inheritance being invested into the family home resulting in the inheritance transforming from a non-matrimonial asset into a matrimonial asset due to the fact that both parties have been utilising it within the marriage. Matrimonialisation rests on the parties treating a non-matrimonial asset as shared.
Within Standish v Standish, the Supreme Court have determined that the Court of Appeal was correct that the assets in question had not become matrimonialised and were therefore not to be shared equally. The purpose of the transfer to the wife of the assets in question was to save on inheritance tax penalties for the children and was not to benefit the wife. Only 25% of the asset was considered matrimonialised and this was therefore shared equally. The husband retained the other 75% of the non-matrimonial asset. The Supreme Court, therefore, rejected the wife’s appeal.
If you are going through a breakdown of your marriage and are struggling to determine whether an asset is a matrimonial asset or a non-matrimonial asset, we at Cygnet Law will be able to offer you some advice and assist you through the divorce and financial process.
