Probate fees increased as probate system modernised

7 November, 2018

 

 

 

 

 

 

 

The Government has re-introduced controversial plans to increase probate fees, which were dropped in the lead up to the snap general election of June 2017 in the face of time pressure and accusations that they amounted to a ‘stealth tax’.

Announcing the revived plans, Lucy Frazer MP said that the increased fees are needed to upgrade and modernise the court system as well as to ensure that access to justice is widely available.

https://www.gov.uk/government/speeches/announcement-on-probate-fees

What are the fees for?

When someone dies, the executors under the deceased’s Will, or their next of kin if there is no Will, need to obtain formal authority (known as ‘grant of probate’ or ‘letters of administration’) from the court so that they can act in the administration of the estate. The grant allows dealings with the deceased’s assets such as money in their bank account or selling their property.

The probate fee is the amount that has to be paid to obtain the grant.

How much is the fee now?

Currently, any estate valued at over £5,000 attracts a fixed probate fee of £215 for individual applicants and £155 for those applying through a solicitor.  Estates worth less than £5,000 are exempt.  Under the new plans, the threshold will increase from £5,000 to £50,000, saving an estimated 25,000 estates from having to pay a fee.

What will the new fee be?

Moving away from a flat rate fee, the amount payable rises on a sliding scale based on the value of the estate.  These can be seen in the table below. The fees should never be more than 0.5% of the value of the estate and the Government statement says it expects around 80% of the estates which exceed the £50,000 threshold will pay £750 or less.

The start date for the new fees is not yet clear.  They are expected to apply to new applications for probate from early in 2019 but we will have only 21 days’ notice between confirmation of the start date and the date when they take effect.

https://www.legislation.gov.uk/ukdsi/2018/9780111174319/pdfs/ukdsi_9780111174319_en.pdf

 

Value of estate before deduction of inheritance tax

New Fee

£0- £50k

 £           –  

£50k-£300k

 £    250.00

£300k-£500k

 £    750.00

£500k-£1m

 £ 2,500.00

£1m-£1.6m

 £ 4,000.00

£1.6m-£2m

 £ 5,000.00

£2m+

 £ 6,000.00

 

What else is happening?

Alongside these proposals, there is a move to make on-line applications for probate the norm, and to encourage applicants to do it for themselves.

The application currently needs to be verified by swearing an oath before a solicitor or notary.  From the end of November 2018, however, only a statement of truth (that the person signing believes that what they are saying is true) will be required.  This simplifies the process, brings it in line with other court proceedings and makes on-line applications easier.

Do I need to do anything now?

If you are in the process of applying for probate and can expedite the application this is worth considering.  A fee on an estate worth £500,000 would be £2,500 – a substantial increase!

Our specialist teams can advise you on ways to mitigate the impact that future fee increases will have through succession planning and reviewing your Wills. They can also advise on steps you can take to submit an application for a grant of probate before the increase in fees.

If you require further guidance please contact Ray Bennett at Ray.Bennett@crippspg.co.uk or on 01892 506 120.