Despite almost total opposition, the Ministry of Justice is pushing ahead with plans to drastically increase probate fees for millions of people. From May of this year, the current flat fee system will be replaced by a sliding scale based upon the value of your estate.

Currently a flat fee of £215 applies if probate is applied for by friends or family, or £155 if a solicitor completes the process. Under the new rules, estates below £50,000 will pay nothing at all – this applies to 58 percent of all estates in England and Wales, according to the Government.

But all estates worth more than £50,000 will be forced to pay increased fees. Those between £50,000 and £300,000 will pay £300; estates worth over £1m but less than £1.6m will pay £8,000; and those above £2m, £20,000 – a 9,000 percent increase! The table below shows the cost of probate for different estate values.

 

How much will probate cost your estate?

Value of estate (before inheritance tax) Proportion of all estates in England and Wales Proposed Fee
Up to £50,000 or exempt from requiring a grant of probate 58pc £0
£50,000 – £300,000 23pc £300
£300,000 – £500,000 11pc £1,000
£500,000 – £1m 6pc £4,000
£1m – £1.6m 1pc £8,000
£1.6m – £2m 0.3pc £12,000
Above £2m 0.5pc £20,000

Ministry of Justice

This table is taken from the Ministry of Justice’s response to their probate consultation.

Probate fees will of course continue to be paid in addition to inheritance tax levies.

Under the plans the Government said no estate will pay a fee that is more than 1 percent of its value. It said 92 percent of estates would pay £1,000 or less, 98 percent would pay £4,000 or less and fewer than 2 percent of estates would pay £8,000 to £20,000.

You pay your probate fees at the same time as sending your probate application form to the Probate Registry. You should also include the inheritance tax form at this point, even if you don’t think there is any tax due.

These proposed changes will add further complexity to estate planning. Using trusts can help reduce the value of an estate for inheritance tax purposes, meaning a lower charge will apply, but individual advice is needed. This seems like a hefty additional death tax that will be hard to avoid.

 

 

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