With just one week to go until the Government’s proposed probate fee increase was due to be introduced, it has been scrapped. Whilst many people will no doubt breathe a sigh of relief, it is not yet clear whether the Government will revisit these proposals if re-elected. Speaking for myself and my colleagues, we had been subjected to additional pressure as a result of such proposals as clients expected us to submit applications before the end of this month in order to avoid paying substantially increased fees.
What are probate fees?
Probate fees are the fees payable to the Probate Registry on application for Grants of Probate when someone dies. The Grant is the legal authority given to executors or administrators of the Estate of the deceased to distribute and administer their property, savings and investments.
What was the extent of the proposed Probate fee increase?
The Budget originally put forward proposals to introduce substantial hikes in probate fees payable from May of this year. Currently, the charges are £215 for those who apply personally, or £155 if the application is made through a solicitor. The new ruling would have resulted in an estimated 58% of Estates worth less than £50,000 incurring no fees at all, an estimated 23% of Estates worth between £50,000 and £300,000 paying £300 and an estimated 11% of Estates valued between £300,000 and £500,000 paying £1,000! For an estimated 6% of Estates worth between £500,000 and £1 million, they would have seen their fee rise to £4,000, around 1% of Estates worth between £1 million and £1.6 million would pay £8,000, and 0.3% worth between £1.6 million and £2 million would pay £12,000 and finally, an estimated 0.5% of the Estates in this country, worth over £2 million, would need to pay a whopping £20,000.
The Government’s argument was that roughly 94% of Estates would have paid no more than £1,000 in Probate fees whereas those Estates over £500,000 would pay substantially more.
Critics claimed these fees to be more representative of a “Stealth Tax” as the Probate fee is payable in addition to any Inheritance Tax already payable, at a massive 40%, on the value of Estates worth more than £325,000.
The Government claimed the increases were necessary to ensure that HM Courts and Tribunal Service (HMCTS) is funded adequately now and in the future, and argues that despite the concerns expressed, these increases are necessary to continue to provide “access to justice”. The main problem is, of course, that a bereaved family does not regard a fee payable to obtain a Grant of Probate as necessarily providing “access to justice” and that, unlike a Court fee, which is often calculated on the value of the dispute in hand, this is an administrative fee payable in order to process essential paperwork. It is for this reason that these fees have remained fixed for many years and, whilst currently representing good value for money, and arguably due for review, the extent of the increases previously proposed resulted in allegations that it no longer represents a “fee” but a “Stealth Tax” representative of a further 1% charge on all Estates valued over £50,000.
We will have to wait and see if the Government revisits this issue or whether they have recognised that this may well represent a huge vote loser!
Emyr Pierce Solicitors
1 Heol Y Deri, Rhiwbina, Cardiff CF14 6HA