Proposed New Probate fees
Previous proposals to reform probate fees were abandoned last year due to the snap general election, however, Lucy Frazer, the justice minister, has announced that the government were pushing ahead with reforms to the probate fees, removing the flat rate (£155 for solicitor applications and £215 for personal applications).
It is being proposed that a new probate fees order will come into force on a date to be appointed, but it is envisaged some time in April 2019. The new fees will be determined by reference to a scale based on the value of the estate:
The proposed fees are:
|On an application for a grant or resealing of a grant where the assessed value of the estate:||Fee payable|
|exceeds £50,000 but does not exceed £300,000||£250|
|exceeds £300,000 but does not exceed £500,000||£750|
|exceeds £500,000 but does not exceed £1m||£2,500|
|exceeds £1m but does not exceed £1.6m||£4000|
|exceeds £1.6m but does not exceed £2m||£5000|
The rise in probate fees has been criticised by many sectors, however, those hit hardest will be charities and farmers.
While farms are high value, putting them into the higher band, cash is often short, meaning that some may need to borrow cash against the farm in order to pay the fee when applying for a grant of probate.
The Institute of Legacy Management has said that the new fee system could cause charities to lose out on as much as £10 million a year in legacy income. Whereas charities are exempt from inheritance tax the proposed probate fees will side-step the exemption.
Critics of the new fee regime have said that this is a new probate tax designed to subsidise other parts of the courts system.
The government defended the latest proposals saying that the higher fees are needed to fund the courts system.
For more advice, contact our dedicated team of probate solicitors.