Probate fees: Should we be pleased the government has scrapped planned changes?

21st April 2017

The calling of a snap election has been the main news story all week. One interesting impact has been the removal of the government's plan to increase probate fees after death.

Despite the headline grabbing figure that probate fees were set to rise from £215 to as high as £20,000, the reality is that these changes would have helped over 50% of the poorest estates. Despite this positive impact, the government had been accused of trying to force these changes through as a fee change rather than a form of taxation.

 

What are probate fees?

 

Applying for probate is the first stage in fulfilling the requirements and claims of a person’s will. Once probate is granted the executor of the will can deal with the deceased person’s assets in accordance with their will.

The press coverage has lacked clarity over exactly what these fees apply to. The fee only applies to the application for the grant of probate. Many bereaved families pay far higher charges if employing a solicitor to complete the application and execute the estate.

There are many resources to help explain how you can pay less for all areas of probate. The government website has a step by step guide for applying for probate and a probate and inheritance tax helpline.
Alternatively, organisations such as the Money Advice Service or the Citizen’s Advice website can help advise before you consider contacting a solicitor

 

What was the proposed change?

 

The current system of probate fees is very simple. There is a £215 flat fee per application with no charge for estates worth under £5,000.

The proposed change was to introduce a sliding scale of charges from £0 to £20,000 for estates worth over £2m

Notably, the changes had meant that there would be no charge for estates worth under £50,000. This would have meant 57% of estates pay nothing for the probate application.

 

Why were they increasing?

 

The government’s defence of the increase was twofold. Firstly, the government pointed to the removal of the burden of probate fees for the poorest families. Secondly, with savings being made from budget cuts, the government claimed these changes were necessary to fund courts and tribunals.

While the government’s defences are logical, it is clear that this is a form of taxation. The proposed probate fees for larger estates far exceed the costs. Therefore, the Joint Committee on Statutory Instruments was right to condemn this as no different to bringing in new taxes without parliamentary approval

 

Why has this increase now been scrapped?

 

There had been a consultation process on probate fees since February that had aired a number of strong opposing views. However, the controversial changes have now been dropped due to the timing of the snap election. There is not enough time to get the changes through parliament prior to the election.

This now becomes a problem for whoever wins the general election in June. Whatever happens next, the publicity around these proposed changes at least means that there will be sufficient scrutiny of changes the next time this is discussed.

 

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