Large Increase in Court Fees for Probate Announced
In 2017, the HM Courts and Tribunals Service proposed a massive increase to the fees charged to obtain a Grant of representation (known as “probate”) which would see the charges for the most valuable estates increase from £155 to £20,000. However, the "snap" General Election in that year led to the increase being postponed - but it has now resurfaced.
The new fees, which are due to take effect from April 2019, have been moderated, but the top level of fees payable will still be £6,000; fees for an average estate are increased to around £750. 90% of estates will pay a higher fee.
There is some good news: for estates up to £50,000 in value, where a Grant of Probate is needed, no fee will be payable. This smaller estates exemption is currently only available for estates of up to £5,000 and the new scale is estimated to lift 25,000 estates out of the scope of the fees each year.
Contrary to the justifications of fairness and progressiveness, the new scale represents a stealth tax on dying and may be unlawful. This new value-based charging system should be introduced by an Act of Parliament following debate in the House of Commons, rather than being slipped ‘in the back door’ through Statutory Instrument. It should have been part of the recent budget.
What does this mean for the public?
If you are already administering the estate of a deceased person and have yet to apply for your grant, apply before the rules change. It is best to take legal advice as rushing to beat the probate court fees may lead to mistakes completing Inheritance Tax returns which, as a result, could lead to HMRC penalties for inaccuracies far greater than the application fee being avoided.
The fee is based on the value of assets owned by the deceased at the date of death. Assets gifted in lifetime, therefore, will be unaffected. The grant will not take into account assets passing by survivorship (assets in joint ownership – not to be confused with assets owned by multiple persons as tenants in common). Care needs to be taken before giving away or sharing assets, and professional advice should be taken.
Talbots Law offer a full suite of wealth and inheritance planning as well as probate related services, helping you and your family plan for the future. We are experts in this area, so call us on 0800 118 1500 to see how you might benefit from our experience.
Ian Bond is Talbots Law's Head of Trusts & Estates as well as chair of the Law Society’s Wills & Equity Committee, which is leading a campaign against the increase in fees. Over the past weekend, Ian spoke with Moneybox on Radio 4 and with newspapers including the Sunday Times to raise awareness and argue against the change.
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