Increased Probate Fees From May 2017
The Government has recently announced its plans to increase the cost of getting a Grant of Representation / Grant of Probate from May 2017.
The news follows a consultation on the plans which was held with various members of the public, the judiciary, charities and legal representatives in February this year.
The proposed increase sees the Probate process moving from the current flat fee of £155 (for applications through a legal representative) or £215 (for applications by members of the public) to a scaled cost which moves in line with the value of the estate (before the inheritance tax bill and any spouse or charity exemptions are applied).
Whilst on the face of it this may seem to some to be proportionate and fair, when you consider that the process and cost to the Probate Registry is the same for all applications, it becomes arguable that the intended proposals serve only to operate in making profit for the Court system and further act as a “back door tax” for larger estates.
When you further consider the level of Probate fees proposed, it is also notable that the increase itself is disproportionate in comparison to the current fee of £155/£217, seeing the fees rise to as much as £20,000 for estates exceeding £2 million.
Value of estate (before inheritance tax is deducted)
Proposed Probate Fees
Up to £50,000
Over £50,000 but below £300,000
Over £300,000 but below £500,000
Over £500,000 but below £1m
Over £1m but below £1.6m
Over £1.6m but below £2m
Full details of the Government’s response to the consultation on its proposed increase to Probate fees can be found here
Despite some 83% of those consulted (around 695 out of 829 responses) disagreeing with the proposal for scaled fees, (even some of those who agreed with the concept of a scaled system disagreed with the level of the fees proposed), the Government’s proposals are set to come into effect from May 2017.
This has led to a number of discussions and concerns about how an Executor of a Will can be expected to find funds to pay for the Grant of Probate, since this expense must be paid when access to assets and funds is limited. There is an argument that banks and building societies will release the fee for the Probate Registry in advance, but whether this will be the case in practice remains to be seen. In any case, this will not assist those estates which are asset rich and cash poor and could lead to hardship for Personal Representatives.
All is not lost
There is hope yet that the fees proposed will be reconsidered with the emergence of a petition requesting a review of this proposal. If this is an issue you feel should be reconsidered then you can sign the petition before 7th September 2017. The petition link can be found here:
If you have questions or concerns about the proposals and your estate then please do not hesitate to Talk to Tollers.