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The New Probate Fees

Posted on April 13th 2017 by

Probate fees are payable by executors when they apply for a Grant of Probate which is a formal document required in order to administer a deceased person’s estate. Currently a flat fee is payable of either £155 for an application made by a solicitor or £215 for an application made by an individual regardless of the value of the estate. Probate fees are separate to inheritance tax and are payable on an application irrespective of whether inheritance tax is due. 

New provisions intended to be introduced from May will replace these flat fees with a system of bands relating to the size of the estate, the same rate will apply to applications regardless of whether the applicant is a solicitor or an individual. The fees will only be payable on estates above £50,000 but above this level costs will rise by between 40% and 9,202%. The money generated, expected to be around £250 million per year, will be used to fund the Courts and Tribunals service.

The new bands are as follows:-

Value of estate

Proposed fee

Up to £50,000

£0

£50,000 to £300,000

£300

£300,000 to £500,000

£1,000

£500,000 to £1 million

£4,000

£1 million to £1.6 million

£8,000

£1.6 million to £2 million

£12,000

Over £2 million

£20,000

As the fees must be paid up front the new rules could cause difficulty for the executors of estates. It is often the case that most of the value of an estate is tied up in assets which are not able to be accessed easily before a Grant has been obtained.  If funds cannot be accessed or are not available then executors may have to fund the probate fees themselves up to £20,000.

A Parliamentary Committee have attacked the legal basis of the probate fees stating that “the Lord Chancellor could be overstepping her power by introducing fees which bear the hallmark of a tax on estates”. They also consider the new provisions to be disproportionate to the service provided by the probate registry. The fee is based on the value of the estate rather than the work involved by the Courts, however the fees are being used to fund the Court and Tribunals service. The Committee have therefore suggested that the new charges look more like taxes than fees and any form of taxation requires the consent of Parliament.

The Ministry of Justice plans remain unchanged despite the Parliamentary Committee’s views, saying that the increases are necessary to help maintain the efficient and effective operation of the rest of the system. The changes will be “considered in Parliament after Easter and will come into force as soon as possible.” These changes are expected to come into effect in May 2017 but  are still subject to Parliamentary approval.

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