HC v SW [2026] EWFC 237

Judgment date: 13 July 2026

https://caselaw.nationalarchives.gov.uk/ewfc/2026/237

Trowell J. Final hearing to determine the extent to which one party’s receipt of restricted stock units and carried interest post-separation should be considered matrimonial property and subject to sharing.

The Family Court was asked to determine the appropriate division of some £86.5m worth of assets following a marital relationship of 24 years. There was substantial agreement between the parties on most matters so the only significant issue for the judge’s determination was whether a substantial proportion of the husband’s wealth, generated post-separation but before the matter came to final hearing, was matrimonial property subject to sharing, or the husband’s non-matrimonial property.

Background and proceedings

The parties are both nationals of a European country. The husband is 51 and the wife is 49. They cohabited from 1999, married in 2004, and separated in 2024. The parties have three children; a 20-year-old at university and 18-year-old twins. The children live primarily with the wife in Europe, while the husband continues to live in Asia with his new partner and their young child.

The husband had enjoyed an extremely successful career in finance and worked for the same US company between 2007 and 2025. He and the family had moved to Asia in 2018 for him to take on a role as head of development in Asia and then become co-head of the Asia business in 2020.

In 2022 the wife and their children moved back from Asia to London while the husband stayed in Asia to work. The husband visited every 6 to 8 weeks, but by early January 2023 both parties had decided to pursue a divorce, making a joint application on 26 March 2024. By this time, the husband was already living with his new partner, and their child was born in 2025.

The parties agreed to attend a private FDR before Simon Webster KC in March 2026 but were not able to resolve matters. The case then came before Mr Justice Trowell over six days in June 2026.

The judgment relates that in 2025 the husband decided to leave the company he had been with since 2007 because his role had effectively been abolished. He was however in good standing with the company and, through what he presented as being very hard work on his part, was able to negotiate a favourable termination agreement governing his departure from the company. This included a significant acceleration in the vesting of his restricted stock units (‘RSUs’) and carried interest (‘carry’), so that rather than the unvested interests vesting over five years, the vesting of his unvested shares and carry would be complete by the time he left the company in December 2025.

Issues before the court

The parties had already agreed that those matrimonial assets not in dispute should be divided equally and had reached a consensus on various other financial matters, including pension sharing. The outstanding and discrete issue of whether the husband’s post-separation accrual of additional assets should also be considered matrimonial and subject to sharing would affect the distribution of a further £25m. In particular, the matters for determination were:

1. The treatment of the post-separation RSUs and carry;
2. Whether the husband’s efforts at securing a favourable exit from the company impacted the parties’ financial picture and the extent to which he should retain the benefit of those endeavours; and
3. Whether fairness dictated that any of the post-separation assets should be shared.

The judge reviewed authorities including E v L [2021] EWFC 60, A v M [2021] EWFC 89, Waggott v Waggott [2018] 2 FLR 406, and his earlier decision of GA v EL [2023] EWFC 2026, from which the following overarching principles in relation to post-separation endeavours and non-matrimonial assets were re-affirmed:

‘1. Post separation non marital assets can exist at the date of trial even where there has been no undue delay;

2⁠. In assessing post separation non marital assets I must guard against counting in the produce of passive growth;

3⁠. I should remain mindful of the extent to which the person claiming post separation assets is simply benefiting from investing the unallocated funds of the other spouse;

4⁠. I should not overlook the domestic contribution which may be taking place by the other spouse;

5⁠. While a formulaic approach may be better than a ‘by and large’ approach I will have to make such assessment as I best can on the facts as I find them.’ [43]

There was agreement between the parties on the principle of Waggott that the judge should not apply the sharing principle to earning capacity as if it were a matrimonial asset. However, there was a fundamental difference of fact, rather than law, between the parties about the extent to which the husband, by continuing to work for the company following separation, had created post separation assets by his endeavours, or whether they had been produced by passive growth.

The court’s findings

Ultimately, the judge rejected a simplistic approach to the division of assets based solely on the date of their receipt. The fact that an award vests, pays out, or is realised after separation does not mean that it is de facto a non-matrimonial asset to which the sharing principle does not apply. Likewise, an award during the currency of the marriage does not guarantee that all aspects of it will be considered matrimonial if it is partly contingent of future events.

For each asset in dispute (the RSUs and carry) the judge undertook a detailed examination of when each was granted, the reason it was granted and what work it rewarded, whether continued future employment was a necessary condition of vesting, and whether subsequent value arose from the husband’s genuine post-separation endeavours.

In the course of this assessment the court recognised that deferred remuneration awards have a dual character in that they often reward work undertaken during the course of the marriage whilst rewarding and incentivising longer term retention, performance or service to the organisation. As such, an award can be partly matrimonial (rewarding performance during the marriage) and non-matrimonial (incentivising and rewarding future performance).

The judge decided the outcome in relation to each asset separately, as follows:

RSUs

These were determined to be both matrimonial and non-matrimonial as the award was made to the husband prior to separation as a consequence of his exceptional performance, and vest if he retains his employment with the company.

It was decided that there should be an award to the wife of half of the RSUs referable (on a straight-line proportionate basis) to the time that the non-vested RSU was held prior to separation as a fraction of the total time it was held prior to vesting. As a result, 35,388 of 67,500 RSUs were considered matrimonial and subject to sharing; [74]–[82].

Carried interest

The husband argued, and proposed openly to the wife, that she should have an entitlement to that part of the carry which related to the amounts vested prior to separation. Conversely, the wife’s position was that the entirety of the husband’s interest as held at the date of trial should be considered matrimonial given the husband was able to expedite the vesting of his carry as a result of the termination agreement he negotiated with the company.

The court reiterated the obvious point that carried interest only generates cash for one of the parties when the scheme pays out. However, it likewise rejected the assumption that carried interest paid out after separation is automatically non-matrimonial. Instead, it drew a distinction, on the facts, between the value accrued through the marital partnership (i.e. resulting from work on specific funds prior to separation) and value generated by genuine post-separation endeavour.

When determining the marital acquest in relation to carry, the judge decided to advance the vesting date by one year from the date of separation to capture the husband’s interests at that date with reference to what is considered marital. The result of this advancement was to consider c.£26.1m of total carry to be £10.8m marital and £15.3m non-marital; [83]–[93].

Overall, the judge found there to be £64m in marital assets, which were divided equally between the parties. In addition, there was a total of some £21m in non-marital assets, c.£19m of which was post-separation accrual and which the husband was to retain. The judge pointed out, in relation to his final assessment as to whether the outcome was fair to both parties, that ‘the wife doesn’t have a claim to share in the wealth which is made after the marriage breaks down’ (¶122), but such sharing claims will need to be considered very carefully on the facts of each case.