21/03/2017
Emma Wood
The government has pressed ahead with plans to increase probate fees by up to £20,000 despite overwhelming opposition.
Probate fees are paid up front by executors in order to allow beneficiaries access to money and assets left to them. Currently, the charge of £215 is payable on all estates worth over £5,000. From May, however, charges on applications for grants of probate will be linked to the size of the estate.
Although, under the new rules, estates valued below £50,000 will be exempt, those worth between £50,000 and £300,000 will incur a charge of £300, whilst assets valued at £300,000 to £500,000 will be billed £1,000 – a 365% increase on the current fee.
Probate charges increase further to £4,000 on assets of £500,000 to £1million, rising again to £8,000 for estates worth between £1million and £1.6million. Those valued up to £2 million will be subject to a fee of £12,000. Finally, the highest charging band is a £20,000 probate bill on estates valued above £2 million, accounting for an eye watering a 9,202% increase on the current probate fees. .
The news comes despite less than 2% of respondents, most of which were legal experts and firms of solicitors, agreeing with the new charges in a consultation carried by the Ministry of Justice.
Lawyers argue that the changes amount to a new form of taxation as the current £215 fee fully meets the cost of the probate service. Critics are also worried that the new rules could cause problems for executors as the fee required to obtain a grant of probate has to be paid in advance. Without it, executors are unable to administer a deceased person’s estate.
The legal profession is also worried that those who are asset rich, but cash poor will find it difficult to raise the money required for the new fees. In particular, it has expressed concern about the financial pressure put on older people who will have to find the money for probate fees to access their spouse’s estate.
While the government has acknowledged the concern, it claims that the rise is necessary to subsidise the rest of the court system in order to continue to provide access to justice in the long term.
Speaking of the changes, Claire Davis, director of Solicitors for the Elderly, said: “SFE is extremely disappointed to see that the consensus to reject the proposed probate fees has been ignored.
“For the 62% of estates that use a solicitor, probate registry performs a purely administrative role, and the value of the estate has no bearing on the work undertaken.
“To burden larger estates with a significantly larger fee is an unfair form of taxation. For people in this situation, their property is often their primary asset, and they have little cash to pay for higher probate fees, on top of other necessities such as IHT or the use of a solicitor.
“The increase in probate fees will place a burden on families at a sensitive and distressing time and is likely to put people who are vulnerable and/or elderly at risk. Our fear is that such clients might be persuaded to take steps to avoid probate fees, even if the effect is to leave them with insufficient assets to provide for themselves for the rest of their life.”
Please note that this article is meant as general guidance and not intended as legal or professional advice. Updates to the law may have changed since this article was published.