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20-12-2018

Here you can read Richard Boulding, Partner & Head of the Wills, Probate and Tax department's latest article which highlights the new banded structure of probate fees from April 2019. He pinpoints concerns over how beneficiaries will be able to fund the payment of the new fees.

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At the beginning of 2017, the government announced it intended to introduce a huge increase in the probate application fees for estates in England and Wales. This plan was dropped when Theresa May called a snap general election in May 2017.

The Ministry of Justice announced earlier this month a plan to introduce a banded structure of probate fees from April 2019; the new death tax.

Currently there is flat probate fee of £215 in England and Wales, irrespective of the value of the deceased’s estate, which is reduced to £155 if you use a solicitor. The proposed new probate fee charges will be linked to the size of the deceased’s estate and will be as follows:-

  • Up to £50,000 - no charge
  • £50,000 to £300,000 - £250
  • £300,000 to £500,000 - £750
  • £500,000 to £1,000,000 - £2,500
  • £1,000,000 to £1,600,000 - £4,000
  • £1,600,000 to £2,000,000 - £5,000
  • Above £2,000,000 - £6,000

The proposed new charges bear no relation to the cost of providing the probate service. In 2017, the House of Commons joint committee on statutory instruments warned that the then proposed 2017 new structure might be unlawful, on the basis that it amounted to abuse of the parliamentary process. The junior justice minister, Lucy Frazer said in early November 2018 that the proposed new fees were necessary to fund a comprehensive reform of the Courts and Tribunals system. However, this means that people with higher value estates will be paying disproportionately for the administrative work involved in obtaining a grant of probate, in addition to estate paying inheritance tax.

There is a very real concern about how beneficiaries will fund the payment of the new probate fees and the problems potentially faced by people who have most of their assets in property, but do not have much cash. For example, the widow where the property was in the sole name of the late husband. Whilst no inheritance tax would be payable, the widow would still need to pay the new higher fee in order to obtain a grant of probate and arrange for the property to be transferred into her sole name.

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