Under government plans new probate fees will be brought in which do away with the flat fee and link the cost to the value of the deceased person’s estate.
The result will be a substantial hike in the fee for probate, increasing the cost to bereaved families of settling the estates of deceased relatives.
At the moment, probate fees are charged at a flat rate of £215 for an individual’s application, and £155 if applying through a solicitor, with no fee being charged for estates under £5,000.
This system will be replaced by a sliding scale of fees linked to an estate’s value, ranging from £250 to a £6,000. Estates valued at less than £50,000 will pay nothing, but those at the top end of more than £2million will pay the maximum £6,000. Those worth between £1.6m and £2m will pay £5,000 and those between £1m and £1.6m £4,000.
The plan to increase probate fees was first mooted last year, but dropped ahead of the General Election. At the time is as branded a “stealth tax” by some, and the Institute of Chartered Accountants in England and Wales called it a “revenue raising exercise”. There were concerns the fees would disproportionately hit those inheriting family homes whose value has soared in recent years.
Now the Ministry of Justice said a revised system of payments, which will come into force in April, will contribute to the running of the courts and tribunal service. The changes were not included in the November Budget and will be enacted via secondary legislation later this month.
Ministers said they had listened to concerns expressed last year and had amended their original proposals. These would have seen a maximum fee of £20,000 on estates worth £2m or above, and estates valued at more than £1m paying a minimum of £8,000.
Justice Minister Lucy Frazer rejected suggestions the fees would make the probate process unaffordable for executors, who are often the direct beneficiaries of an estate, such as the children of the deceased.
She said they would be able to “recover” the fees from the proceeds of the estate and would have a number of options as to how to pay them.
However, the new charges do appear to be a tax rise on the rise in house prices. The Society of Trust and Estate Practitioners said 85% of estates would have been liable for higher fees, based on 2014-5 figures.
If nothing else, this increase in probate fees highlights the importance of seeking legal advice. Probate can be a complicated process, so better to engage the help of professionals – such as the wills and probate team here at Optimum – when there may be such a high fee at stake.