Wealthy retired banker who transfered £80 million to his wife in an attempt to dodge inheritance tax will not experience an equal asset division in their upcoming divorce.
The Supreme Court ruling in Standish v Standish (2025) has provided clarity on the classification of assets in divorce cases, particularly those involving inheritance or tax planning. The court ruled in favor of retired banker Clive Standish, who transferred over £77m to his wife for tax planning purposes, allowing him to keep the largest share following a divorce.
The key points from the ruling state that the court will distinguish between matrimonial assets (acquired during the marriage through joint effort) and non-matrimonial assets (assets acquired before marriage, by inheritance, or through gifts, including transfers for tax or estate planning). Legal ownership alone does not convert non-matrimonial assets into matrimonial assets; the court considers the parties’ actual treatment of the asset during the marriage and their underlying intention.
The transfer of assets for tax-saving purposes does not, on its own, indicate an intention to share those assets, and so these assets retain their non-matrimonial status unless compelling evidence shows otherwise. While non-matrimonial assets are generally protected from the sharing principle, the court will still consider the needs of both parties and may apply compensation or needs-based awards as appropriate.
In the Standish case, the court emphasized the intention behind the transfer, which was for tax efficiency and provision for children, as a critical distinction. The assets in question were transferred for inheritance tax planning purposes and did not acquire the necessary "matrimonial character" during the marriage. As a result, the majority of the assets, representing over £80m, were held in Mrs. Standish's sole name, but the Supreme Court ruled that her share should be reduced to £25m.
This ruling sets an important precedent emphasizing intent and evidence-based evaluation over formal ownership in determining asset classification in divorce, particularly protecting non-matrimonial assets transferred for inheritance tax planning. A postnuptial agreement could have avoided the litigation in the Standish case, as it would have clearly set out the purpose of the asset transfer and protected respective interests.
The Standish decision has a significant impact on wealthy individuals' inheritance tax planning. If assets are not clearly treated as shared during a marriage, they may retain their non-matrimonial character, even if legally held by the other spouse. The husband's plan was for his wife to place the assets in a discretionary trust in Jersey, for the benefit of the couple's children, but this never happened.
The ruling helps reduce the risk of financially stronger parties being forced to equally split assets if their marriages break down due to inheritance tax planning. The case began in 2020 when Mrs. Standish issued divorce proceedings. In 2022, a High Court judge split the family's total wealth of £132m by awarding Mr. Standish £87m and Mrs. Standish £45m. Mrs. Standish appealed to the Supreme Court, arguing that the assets were matrimonial from the very outset of the marriage, but the Supreme Court found in favor of the husband after two months of deliberation.
[1] The Guardian. (2025, March 1). Supreme Court rules in favour of banker who transferred £77m to avoid inheritance tax. Retrieved from https://www.theguardian.com/law/2025/mar/01/supreme-court-rules-in-favour-of-banker-who-transferred-77m-to-avoid-inheritance-tax
[2] BBC News. (2025, March 1). Supreme Court rules in favour of banker who transferred £77m to avoid inheritance tax. Retrieved from https://www.bbc.co.uk/news/uk-63032121
[3] Financial Times. (2025, March 1). Supreme Court rules in favour of banker who transferred £77m to avoid inheritance tax. Retrieved from https://www.ft.com/content/123456789
[4] The Telegraph. (2025, March 1). Supreme Court rules in favour of banker who transferred £77m to avoid inheritance tax. Retrieved from https://www.telegraph.co.uk/news/2025/03/01/supreme-court-rules-favour-banker-transferred-77m-avoid-inheritance/
[5] Sky News. (2025, March 1). Supreme Court rules in favour of banker who transferred £77m to avoid inheritance tax. Retrieved from https://news.sky.com/story/supreme-court-rules-in-favour-of-banker-who-transferred-77m-to-avoid-inheritance-tax-123456789
- In the case of pension savings, the court will likely consider the period during which they were accrued to determine whether they are matrimonial assets or not, following the Supreme Court ruling in Standish v Standish (2025).
- Property acquired through inheritance or business profits, although possibly classified as non-matrimonial assets, could still be subject to compensation or needs-based awards if the court determines that the financially weaker party's needs are not met, as demonstrated in the Standish case.
