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28 August 2018

Probate fees to skyrocket despite overwhelming objections

Posted by: Chris Burrows

The Government is set to dramatically increase the fees payable when applying for the grant of probate from May this year.The responses to the consultation were overwhelmingly against the proposals.  83% of respondents opposed the introduction of probate fees charged based on the value of the estate, as opposed to the flat fee currently in place.The report makes no secret of the fact that the increased fees will be used to prop up the costs of the Courts and Tribunals service as a whole and is not linked to the level of service provided by the Probate Registries.  The level of administration required to issue a grant of probate does not change depending on the value of the estate.One positive point in the otherwise depressing report is that the exemption for probate fees is to increase so that there will not be a fee for estates worth less than £50,000.  However, all other estates will pay a fee starting at £300 (almost double the current fee) and increasing on a banded scale to £20,000 for estates worth over £2 million.The fee hike is going to present significant difficulties for families who will have to find cash to pay the probate fee before they can get access to their deceased relative’s assets.  The banks might agree to release the funds for the application, in the same way they do to pay inheritance tax, but this will not always be possible.  The Government suggest that the deceased’s executors can either pay the fee themselves, borrow it using a personal loan or ask the solicitors acting in the estate to lend it to them.  This is unlikely to be an attractive option for families or their professional advisers.Inheritance tax does not apply to assets passing to a surviving spouse or civil partner, or gifts to charity, however it seems like the probate fee will apply regardless of who is inheriting.Clients frequently ask what steps they can take to reduce their inheritance tax bill, but it looks like there will be very few avenues available to bring down the costs of the probate application.The final detail of the policy is awaited, but the new fee structure is likely to cause significant extra costs for bereaved families in return for very little direct benefit.

Following the consultation, the government has decided to proceed with all the proposals as set out in the consultation; a summary of the responses and details of the reasons for that decision are set out in the consultation response, published here alongside an assessment of the impacts of these proposals and an updated equalities statement.
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Chris Burrows

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