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On 5th November 2018, the Government announced planned changes to Probate fees which will see the current flat rate (£155 when applying through a Solicitor and £215 for a personal application) change to a sliding scale dependent on the value of the estate.
Personal representatives – known as executors where they are appointed by a will, or otherwise known as administrators - apply to the Court to prove their authority to administer the estate (generically referred to as applying for 'Probate') to close bank accounts, sell property and distribute assets. The Court fees are payable from the estate or refunded from the estate to whoever paid them.
The new sliding scale is proposed as follows:
£5,000 - £50,000 - no fee
£50,000. - £300,000 - £250
£300,000 - £500,000 - £750
£500,000 - £1,000,000 - £2,500
£1,000,000 - £1,600,000 - £4,000
£1,600,000 - £2,000,000 - £5,000
Over £2,000,000 - £6,000
The Government estimates that by raising the threshold from £5,000 to £50,000, that around 25,000 estates a year in England & Wales will not have to pay fees; for 80% of estates the fees will be £750 or less, with only the larger estates paying a higher fee and never more than 0.5% of the value of the estate. The fees, they say, will be used to modernise and upgrade the Courts and Tribunals system.
This does not come as a shock to the legal profession since the Government first consulted on this early in 2016. The proposed fees at that time were even higher than those now announced, and were widely criticised within the legal profession since the administrative process within the Court system for issuing a grant for a small or large estate is the same. As a result of the snap General Election those proposed changes were shelved back in April 2017.
The latest proposals have been met with further criticism, with the Law Society accusing the government of 'increasing inheritance tax by stealth' the changes due to be introduced by Statutory Instrument and thereby avoiding Parliamentary scrutiny. Charities, highly reliant on legacies from wills to fund their services, are concerned that these gifts will now be lost to the higher Court fees. Many executors will find themselves in a Catch-22 situation and face difficulties in raising the fee to apply for the grant but with the deceased's assets being frozen until the grant is issued.
If you are unsure of your legal responsibilities, it is always wise to take specialist advice. Andrew & Co's Private Client team can advise on any aspect of probate and the administration of an estate and if you have any queries, please contact us on 01522 512123 or 01636673743.