Government increases probate fees from May 2017: what it means for you
The Government has confirmed it will be implementing the increase in probate fees from May 2017.
Currently, the cost of of applying for a grant of probate is set at £155, when applied for by a solicitor, and £215 when undertaken by an individual. This flat fee will be replaced by a new system of tiered charges as follows:
- £300 for estates worth more than £50,000 and up to £300,000
- £1,000 for estates worth more than £300,000 and up to £500,000
- £4,000 for estates worth more than £500,000 and up to £1 million
- £8,000 for estates worth more than £1 million and up to £1.6 million
- £12,000 for estates worth more than £1.6 million and up to £2 million
- £20,000 for estates worth more than £2 million
When the astronomical rise in probate fees was consulted upon last year, it was hoped that it would enable investment to transform the courts and tribunal services through modernisation. It is expected to reduce the deficit as well as making the probate process easier and more accessible. The Government’s objective is to help ease the burden of the taxpayer; but is this more a case of stealing from Peter to pay Paul?
The new tiered system could have a particular impact on Londoners: with the average London home being worth in excess of £500,000, many London families could find themselves subject to increased costs on the death of a loved one. Whilst on paper £4,000 may seem a minor cost to bear on a £500,000 estate, in practice it may mean many families having to turn to banks, or sell off assets, just to meet the court fees required to administer an estate. This will be particularly burdensome for families where the bulk of the wealth is retained in the value of the family home.
Kingston Smith partner, Lynne Rowland, commented: “The Government hailed the proposals last year as progressive, with the lower value estates being exempt from paying the fees and remaining estates only paying more as the value increases. As the fees are calculated prior to the deduction of inheritance tax, however, it begs the question as to whether the double whammy of inheritance tax and now the increase in court fees might be another veiled attack by the Government on the moderately wealthy.”
The rise in probate fees is another reason why, now more than ever, families should seek professional advice when it comes to wealth planning for the future.