Proposed New Probate Fees

The UK Government has announced to escalate the probate fees from April 2019. Families may end up paying up to £6000 to execute the will of closed relatives. This higher fee will affect almost 300,00 families each year. However, the Government is expecting to raise £145m in its first year.

Grants of probate

When a person dies, someone from the deceased’s family must administer the estate. If the deceased left a will and appointed an executor, the person will need to apply for ‘grant of probate’. In the absence of a will, the next to kin must apply for ‘grant of letters of administration’.

The grant of probate will prove the authority to administer the deceased’s estate. Probate fees are payable upfront for the application of grant of probate. At present, probate applications by solicitors incurs a fee of £155 and probate applications by individual attracts a fee of £215. These two are the flat fees for any grant of probate application. The fees are currently chargeable only if the estate worth is £5000 or more.

The Proposed new fees:

The proposed fees will be implemented from April 2019. Please note that the changes will only apply to England and Wales. Scotland and Northern Ireland have different probate fees.  The Minister of Justice said that it plans to publish guidance on ways to pay the fees. The aim is to introduce a sliding scale of fees depending on the value of the deceased’s estate. The following table shows the proposed probate fees:

Estate Value Proposed Probate fees Amount Increased
£50,000 to £300,000 £250 £35
£300,000-£500,000 £750 £535
£500,000 and £1m £2500 £2285
£1m and £1.6m £4,000 £3785
£1.6m and £2m £5,000 £4785
Over £2m £6,000 £5785

 

How the proposed fees are justified:

Now the question comes how the Government is justifying the new fees. The junior justice minister, Lucy Frazer, stated that the new fees will uphold the governments’ commitment to ‘’protecting access to justice by ensuring we have a properly funded and resourced courts system.’’ This statement certainly draws several arguments. Firstly, it’s not the duty of the bereaved families to endow the court system. Secondly, the court is supposed to be funded by general taxation, not by the probate fees. The same concern has been expressed by the Law Society and it has urged to take action against the ‘’probate stealth tax’’.

 

What are the arguments against it:

The hike in probate fees has already been subject to criticisms. Firstly, there is no justified reason to introduce a banded system. The Ministers have admitted that the amount of time and cost for granting the probate is identical for any given estate.  Hence, it seems unethical to charge additional fees because of the value of the estate.

Secondly, the fees are payable upfront. We can imagine the hardship of the executors to fund the escalated probate fees. Borrowing could be an option; but the executors may find it lengthy or not interested at all to borrow the funds.

Thirdly, the concerned individuals may take risky measures by renouncing some or all control over the estate. This may lead to a situation where they would try to sidestep or reduce these considerable payments after their death.

Fourthly, the procedure to enforce the new fees has already been questioned. We believe that the hike in probate fees indisputably requires scrutiny and primary legislation is the only way to accomplish the required inspection. To our surprise, the Government is planning to soar up the fees through a ‘’Statutory Instrument’’ instead of ‘’Primary Legislation’’. This will attract less attention and scrutiny. However, we are of the opinion that it will establish a dangerous precedent as taxes can be increased without being subjected to a parliamentary vote.

Is there a bright side:

Well, the Government has planned some positive attempts to curb the probate fees. The good news is that the threshold has been lifted from £5,00 to £50,000. The Government presumes that annually £25,000 estates will be exempted out of fees altogether. Moreover, the fee is capped at no more that 0.5 percent of the value of the estate and 80 percent of estates will pay £750 or less.

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