The Matrimonialisation of Assets in a Marriage: A Case Study on ST v AR

While the case of Standish v Standish is currently awaiting judgement from the Supreme Court, the recent case of ST v AR, heard earlier this year, also considers the question of “matrimonialisation” of assets. 

The term “matrimonialisation” describes a situation where one party brings assets into the marriage which then become part of the marital pot. For example, if one party owned a home before the marriage and this became the family home, this asset would generally be considered to be part of the marital pot (Miller v McFarlane [2006] UKHL 24), even if it was not divided equally on separation (Vaughan v Vaughan [2008] 1 FLR 1108). 

Both Standish and ST v AR consider the extent to which inherited assets will be matrimonialised. In ST v AR the husband was found to have assets in excess of £100 million, which principally came from an inheritance from his grandparents. The matrimonial assets were found to be worth an additional £23.7 million. The parties were married for over ten years. They had been in a relationship prior to marriage but pre-marital cohabitation had not been seamless. They had one child together. 

The wife accepted that the inheritance was non-matrimonial but argued that she should be entitled to a share in the amount by which the inheritance fund increased during the marriage. The increase was valued at £52 million so the wife argued she should be entitled to £26 million. She argued that the husband had been actively involved in managing his business interests and this effort had produced the increase in value. 

However, in the Court of first instance HHJ Vincent found that the husband had in fact been a passive investor. His business interests were therefore not matrimonialised. HHJ Vincent also considered that the funds were illiquid because of the husband’s considerable Capital Gains Tax liability. This suggests an increasingly pragmatic approach is being taken to the question of matrimonialisation in the Family Courts. 

In the end, the wife was awarded £4 million to rehouse, an £8 million fund in respect of Spousal Maintenance, an enhancement of £1.5 million and £250,000 for her outstanding legal fees. This amounted to 9% of the parties’ overall assets. 

At SE-Solicitors, our experienced and award winning Family legal team have particular expertise in complex financial remedies following divorce and separation, if you require any issues raised in this blog, please get in touch with me, Rebecca Curran here Rebecca Curran – SE Solicitors or on 01295 204055.