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Probate fee increase…the good, the bad and the controversial
The Government has confirmed that they will be resurrecting their plans to increase the Probate Court fee. These controversial proposals were dropped ahead of the general election back in 2017 but new plans will see them come into effect, albeit in a modified form, from April 2019.
For those estates up to £50,000, where a Grant of Probate is needed, there will now be no fee payable. This is good news for smaller estates as currently it is only estates of up to £5,000 that pay no fee. This is estimated to annually lift 25,000 estates out of the scope of the fees.
The new amounts are also hugely reduced from the dropped proposals last year, which would have seen a staggering fee of £20,000 for estates over £2m.
The current fees for obtaining a Grant are £155 if using a solicitor and £215 without. The proposed fees, where probate is needed, are set out below:
|Value of estate (before Inheritance Tax)||Proposed fee|
|Up to £50,000||£0|
|£50,000 - £300,000||£250|
|£300,000 - £500,000||£750|
|£500,000 - £1m||£2,500|
|£1m - £1.6m||£4,000|
|£1.6m - £2m||£5,000|
Whilst the fees are lower than previously proposed there is still a 3,770% increase for estates over £2m (£155 to £6,000). Whilst it is estimated that 80% of estates will pay £750 or less this will not be the case for the majority of those living in London and the South East where property prices have led to increased wealth.
It has been argued that the increased fees were originally proposed to subsidise other parts of the Court and Tribunals service, which is unfair to expect bereaved families to fund. But why the bigger increase for the larger estates? We know that there is no more work for the Probate Registry to do on larger estates so how can an increase in fee be justifiable without calling it a further tax?
Also where is the money going to come from to pay the fee? At the moment banks will only unfreeze deceased funds to pay for the funeral costs and any Inheritance Tax. Will that mean executors will have to use their own funds to pay the fee?
Let’s hope that more detailed guidance is available soon. If you are needing to apply for a Grant of Probate we would advise you to make the application early as there will be delays with applications building up before the above fees come into effect.
If you do need any advice on Probate please get in touch and ask about our 30 minute free consultation.
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