Enormous and controversial changes to Probate fees
Despite resounding criticism from Probate lawyers and other experts, the Government has proceeded with controversial changes to the Probate fees chargeable from estates, which could cost some estates £20,000.
The proposals, which are expected to be implemented in the coming months, will see many executors struggling to find adequate finances from estates in order to pay the fees upfront before the Grant of Probate can be obtained.
Particularly with “property-rich, cash-poor” estates, liquid assets will not be available to pay fees which will have increased by up to 129 times their original cost. Furthermore some banks do not provide cash from estates to pay administration costs upfront. Where cash is unavailable, HMCTS recommends that executors seek a loan (depending on their credit rating), pay upfront themselves, or simply renounce.
In such “Catch 22” situations, where the Grant is needed to receive sufficient estate assets to pay for said Grant, executors may face additional expenses and delays: all of which ultimately will affect beneficiaries in the long run.
The proposed fee tiers were met with fierce disapproval. To quote the Government’s own response to the consultation: “We received 831 responses to this question. 13 respondents agreed with the proposal.” The Government nevertheless intends to proceed implementing these proposals into law.
The only two groups who stand to benefit are those who are administering to estates under £50,000 – which in many circumstances do not require the Grant of Probate anyway – and insurance companies whose policies the Government recommends as a means of cushioning the blow.
The government has yet to comment on whether the fee increases for estates over £50,000 constitute unlawful taxation, i.e. levies on taxpayers without Parliamentary approval.
The following table demonstrated the estate tiers to be implemented, alongside the percentage of estates estimated to be affected and the new fee applicable.
|Up to £50,000 or exempt from requiring a grant of probate||58%||£0|
|£50,000 – £300,000||23%||£300|
|£300,000 – £500,000||11%||£1,000|
|£500,000 – £1m||6%||£4,000|
|£1m – £1.6m||1%||£8,000|
|£1.6m – £2m||0.3%||£12,000|