Probate Stealth Tax Getting Closer To Reality
15th Feb 2019
It’s been reported that the Plans to increase probate fees to as much as £6,000 have been narrowly approved following a recent committee hearing. The Fourteenth Delegated Legislation Committee voted by nine votes to eight to approve a statutory instrument (SI) applying a sliding scale of charges based on the value of estates rather than a flat fee.
Under the proposed new system, estates valued at more than £2m will now pay £6,000, while those worth between £1.6m and £2m will pay £5,000 and those between £1m and £1.6m £4,000.
The figure will fall to £2,500 for estates worth between £500,000 and £1m while those in the £50,000 to £300,000 price bracket will pay £250. Those valued at less than £50,000 will not pay anything
Justice Minister Lucy Frazer QC said the new measures would introduce a ‘progressive’ banded system. She rejected criticism from two committees and the House of Lords which suggested that the new fees amounted to a misuse of powers by the Lord Chancellor.
The first indication of an increase was published in February 2016 and attracted overwhelming opposition, especially in view of the government’s subsequent admission to parliament that the Probate Registry was already self-funding on the existing fee structure.
The Ministry of Justice’s consultation response recorded only 63 out of 829 respondents agreeing with linking probate fees to the value of the estate, and 695 disagreeing. The majority of the responses considered that the proposed fees were far too high and because they would be set above cost recovery levels, would effectively constitute a form of taxation.
The underlying opinion is that the changes amount to little more than a tax on bereaved families. The new charges will really impact cash-poor property owners, especially rural families with small farms, as beneficiaries will need to raise a considerable sum to obtain probate – one minister even suggested that families could simply get a loan.
The changes re enforce the need to get good quality legal advice from the outset, as mistakes could be made that are detrimental to the future management of the estate, increasing charges.
It may also be a good time for families to consider their Wills and the roles their Executors will need to play in relation to the change in fee structure.
At Rogers & Norton we have a knowledgeable and experienced team who are able to offer advice on how best to plan for the future and ensure that all clients are fully aware of how their estates will be dealt with. Our team also deals with:-
- Will planning
- Tax and Estate Planning
- Lasting Powers Of Attorney
- Deputyships
- Later Life Planning
You can contact us at wills@rogers-norton.co.uk or on 01603 675655.
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