Kelly Richardson, Private Client Solicitor

Important changes to probate fees

03
Apr

 

Despite significant criticism, the Government is continuing to push ahead with plans to increase probate fees, although the exact date is still to be confirmed.

Currently, the fee for applying for a grant of representation where the deceased’s estate is valued at over £5,000 is a fixed fee of either £155 (if the application is made by a solicitor) or £215 (for a personal application).  The new fee structure will see probate fees increase by as much as £5,845 for estates valued at more than £2 million. 

The Ministry of Justice state that the extra income raised, estimated to be £145 million per year, will be spent on running the courts and tribunal service as a whole.  However, this argument has been criticised by the House of Lords Legislation Scrutiny Committee who stated “different groups of customers should not be charged different amounts for a service costing the same... Similarly, cross subsidies are not standard practice.”  The proposals have also been criticised for moving from being an administrative charge to being a ‘stealth tax’.

 

What is changing?

  • The threshold below which no probate application fee is payable will increase from £5,000 to £50,000.  The Ministry of Justice estimate that by raising this threshold, around 25,000 estates per year will no longer have to pay probate fees.
  • The current fixed fees for probate applications will be replaced by a banded fee structure, with fees increasing in line with the value of the estate, as shown below:

 

Value of estate (before inheritance tax)

Proposed Fee

Below £50,000

£0

£50,000 - £300,000

£250

£300,000 - £500,000

£750

£500,000 - £1m

£2,500

£1m - £1.6m

£4,000

£1.6m - £2m

£5,000

More than £2m

£6,000

 

Methods of paying the fee

The fees must be paid from the estate at the time of the application, and many personal representatives may struggle to access such large amounts of money before obtaining the grant of representation.

The Government have suggested the following options:

  • Using funds in the deceased’s estate from bank or building society accounts.  If the bank or building society will not release funds prior to the grant of representation being issued, the Government advise that the probate service is willing to write to the relevant institution to provide reassurance that the assets are needed to pay the fee.
  • Obtaining a personal or executor’s loan.
  • Limited grants of probate to provide partial access to specific assets of the deceased for the sole purpose of paying the fee.

 

If you have a query relating to this article, or require further advice on any aspect of probate and the administration of estates, please contact a member of our Private Client team on 0191 3842441.

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