Author: Gail Harris
The executors of some wills and estates in England and Wales can expect to pay hefty probate fees from 1 May 2017, as courts prepare to move from flat fees to a sliding scale of charges.
The government announced plans that will see probate application fees rise by as much as 9,200 per cent, in what some are calling ‘bereavement tax’.
At the moment, probate court fees are a flat rate of £215 for in-person applications and £155 when applying through a solicitor. These fees are payable for all estates valued at more than £5,000. There are no fees for estates valued below £5,000.
The legal sector has strongly opposed the increase, which is set to bring in an extra £250 million a year for the government, subject to the plans being approved by parliament. The Law Society said: “It is unfair and discriminatory to expect the bereaved to fund/subsidise other parts of the courts and tribunals service.”
The band where no fee is payable increases from £5,000 to £50,000; which is good news for the 30,000 or so estates that fall within that bracket each year.
The rise will however hit the ‘middle bracket’ ie, those estates worth between £300,000 and £500,000, where the fee increases to £1,000, equating to a 365 per cent rise from the current £215. The worst hit will be those estates worth in excess of £2 million which will attract a probate fee of £20,000 – a staggering 9,200 per cent increase.
There are concerns that many people will continue to be pushed out of the ‘nil rate band’ because of increases in property prices. Those living in ‘property hotspots’, particularly in London and the south have benefited from soaring property prices but they now have to worry about death taxes.
Further concerns are that the new fees will create problems where estates are not easily converted to cash or there are insufficient cash assets available to pay the fees. In these circumstances, executors may well be left to raise the money themselves, and this could lead to expensive bridging loans being taken out in order to avoid additional administrative costs through delays.
A spokesperson for the MoJ said: “Fees are necessary to maintain accessible, world-leading justice system which puts the needs of victims and vulnerable first.”
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