The Government has decided to reintroduce its proposal to increase probate fees, very substantially. Probate fees are the charges imposed by the Probate Registry for the issue of a Grant of Representation, usually a Grant of Probate, which is required to deal with the estate of a deceased person. This is ostensibly designed to fund the current comprehensive reform of the Courts and Tribunals system. The Government first tried to impose a probate fees hike last year but the proposal was dropped when the Prime Minister called the snap general election. At that time the Government had been warned that the punitive hike in probate fees was probably unlawful and was in effect an additional form of taxation on death.
The present basic fee for obtaining a Grant of Probate is £215 or £155 if the application is lodged by a solicitor. This flat fee applies for all estates with a net value in excess of £5,000. The proposed fees will be based on the following scale which depends on the value of the estate in question.
Value of Estate New Fee
Up to £50,000 £0
£50,001 to £300,000 £250
£300,001 to £500,000 £750
£500,001 to £1,000,000 £2,500
£1,000,001 to £1,600,000 £4,000
£1,600,001 to £2,000,000 £5,000
Over £2,000,000 £6,000
It is understood that the new probate fees will be introduced in April 2019. It remains to be seen whether the fees hike will go ahead but this proposal is likely to be very contentious.
Whilst more estates of a lower value will escape tax, and the first tier charge is not hugely greater than the current fee, the new rates increase very sharply. For anyone dying in this part of the world, where property prices are high, the increase in the fee to be charged is very substantial and could be seen as a new wealth tax. Interestingly, the new fees are quite a bit less than those proposed last year, which may indicate some Government sensitivity.
As it can often take several months to prepare the application for a Grant of Probate, it will prove very difficult to capture the current probate fee except for cases where a death has already occurred, or for people who die in the next couple of months or so. In the vast majority of cases, going forward, probate fees will be very substantial, particularly for higher value estates,.
Taylor Walton will, of course, do its best to ensure that probate applications are made in a timely manner and will do everything reasonably possible to try and ensure that the current low fees are captured, for estates where the application for the Grant of Probate is in the pipeline.