Scrapping of Probate Fees21-Apr-2017

On arrival at work this morning, after having spent the past few weeks working diligently to avoid a substantial increase in probate court fees for our clients, our Wills, Trusts and Estates department were pleased to learn that, for the time being, the government have decided to scrap the introduction of a sharp increase in probate fees which were due to be implemented in just over a weeks time, at the start of May 2017.

The new fee scheme meant that when personal representatives were applying to courts to obtain a Grant of Representation (the legal authority required to deal with a person’s estate), the previous flat fee of £155 or £215 (depending on whether the application was made by a solicitor or individual) which applied regardless of the value of the estate, would be replaced by the following tiered fee scale:-

Value of Estate Proposed New Probate Application fee

Up to £50,000 £0

Exceeds £50,000 but does not exceed £300,000 £300

Exceeds £300,000 but does not exceed £500,000 £1,000

Exceeds £500,000 but does not exceed £1 million £4,000

Exceeds £1 million but does not exceed £1.6 million £8,000

Exceeds £1.6 million but does not exceed £2 million £12,000

Exceeds £2 million £20,000

The scheme was proposed by the current government in order to raise an estimated £300 million a year to contribute towards the court system which some observers see as a step towards the courts and justice system becoming fully self-funded. However, the new fee scheme received an overwhelming amount of opposition and criticism from legal professionals throughout the country who largely viewed the scheme as a punitive and unjustified additional stealth death tax on top of already substantial rates of inheritance tax. There was considerable concern about how personal representatives would pay for the probate fees given that they would need to settle this fee at the same time as paying inheritance tax and before the Grant of Representation had been obtained. It is only once the Grant of Representation has been obtained that the personal representatives can usually gain access to the deceased’s funds. This could result in personal representatives having to obtain loans or utilise their own funds in order to settle the substantial fees and taxes.

The reason provided by the government for scrapping the scheme is that with the sudden upcoming general election, there would not be enough time to pass the legislation through Parliament. The scrappage of the scheme at this point does bring about the possibility of the proposals being dropped altogether, however, many believe that if the Conservative Party forms the next government, the fees will be re-introduced and implemented fully.

If you would like any advice regarding Inheritance Tax, Estate Planning, Wills or the possibility of higher probate fees being introduced, please get in touch with a member of our Wills, Trusts and Estates department on 01244 356789.