The proposed controversial Ministry of Justice changes to probate fees have been scrapped because of the snap general election, the government has confirmed.
The MoJ probate fee overhaul, announced earlier this year, would have set fees in line with the value of the estate, rather than the existing flat fee system. The plan had proved controversial, as in some instances it could have resulted in charges of up to £20,000 – up to 129 times higher than the current flat level.
The Ministry of Justice previously said the plans were due to be considered in parliament after Easter and implemented ‘shortly after’. However, in the light of last week’s snap general election announcement, a MoJ spokesperson has since confirmed today that the proposals will not have enough time to pass through the house before parliament is dissolved on 3rd May.
News that the proposals have been dropped by welcomed by most lawyers. The original proposals were criticised by a joint parliamentary committee that considers statutory instruments earlier this month: the committee attacked the legal basis of the fees, saying that the lord chancellor could be acting ultra vires in collecting money this way. The proposals had also been roundly criticised by solicitors and pressure groups who claimed the they effectively amounted to a stealth tax.
On hearing the MoJ’s statement, Ann Cory, senior associate at Wilsons, told the Law Society Gazette:
‘The government’s decision to scrap plans to raise probate fees – which represented a tax on the wealthy in all but name – is very welcome.’
‘The hope is that this is at least in some part due to the 97.5 per cent objection rate the plans received from industry experts when under consultation – not to mention the voices of those who would have been most severely affected by them.’
‘These plans would be hugely damaging to many families across the UK – especially those who are asset rich and cash poor. They would also impact on the charity sector reducing the amount gifted to them and therefore the amount available for good causes.’
‘The fact remains that the work involved in processing and granting probate doesn’t increase when dealing with large estates. There is little, if any, extra work involved in granting probate on an estate of £5 million than there is on a £50,000 estate.’
Jenny Cutts, a private client partner at Wedlake Bell, told the Gazette the announcement should be taken as good news ‘whatever your views are on the forthcoming election’:
‘Raising the administrative fees up to £20,000 to obtain probate is a disproportionate measure which would have further burdened a large number of families. No one should have to pay this – let’s hope these controversial plans to impose a further tax on estates are ditched for good,’ she added.
Law Society president, Robert Bourns, added:
‘This proposal would have affected 42 per cent of estates and would have put pressure on families when they have just suffered a bereavement so we are glad it is no longer going forward.’