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Government Proposals for Probate Fees increase

In a letter to the House of Commons of 18 February 2016,  justice select committee, justice minister Shailesh Vara set out reforms ‘to increase income for a more sustainable courts and tribunals service and to introduce a more progressive regime’ in relation to probate fees.

In other words a more expensive regime!

Currently probate applications are charged at a flat fee of £215 for a personal application and £155 for applications made by a solicitor, on estates worth £5,000 or more. The proposal is:-

  • To increase the threshold from £5,000 to £50,000
  • For estates worth more than £50,000 the probate fees to increase ‘in line with the value of the estate’

Proposed new scale of probate fees before inheritance tax:

  • £300 for estates worth more than £50,000 and up to £300,000
  • £1,000 for estates worth more than £300,000 and up to £500,000
  • £4,000 for estates worth more than £500,000 and up to £1m
  • £8,000 for estates worth more than £1m and up to £1.6m
  • £12,000 for estates worth more than £1.6m and up to £2m
  • £20,000 for estates worth more than £2m

The changes are part of a drive to reduce the cost of running courts and tribunals to taxpayers.

Justice minister Shailesh Vara said court fees were never popular, but that the maximum £20,000 fee would “only be paid by the very wealthiest estates”, while charges would never be more than 1% of its total value.

He said 84% of estates would incur fees of £300 or nothing, and 94% would pay £1,000 or less.

Justice minister Shailesh Vara  went on to say that “these proposals are progressive, with lower value estates lifted out of paying any fee at all and other estates only paying more as the value of estate increases. They are also necessary, making a significant contribution to reducing the deficit and enabling investment which will transform the courts and tribunals service,”.

Aside from the proposals relating to fees Justice minister Shailesh Vara  is proposing a ‘simpler, more streamlined process for probate application, moving from a  paper-based system to an online system’. A move which I am sure will be welcomed by all.

In my view, it seems disproportionate that the larger estates will pay more in fees compared to the smaller estates given the work that the Probate Registry do to process the application is the same regardless of the value of the estate! It needs to be remembered that this is a fee (or tax) on larger estates which is in addition to inheritance tax which is charged at 40% on estates above £325,000. With the current high house prices many estates needing a Grant of Probate will quickly fall into the bracket paying £4,000 in court fees compared to the current £155 which represents a 2,580% increase!

At this point these are just proposals and it is hoped that once written responses are submitted to the consultation they will be amended.

If you would like further information on this article or about Wills and Probate then please contact Dagmara Kulczykowska TEP, Head of Wills & Probate on 01908 689341.