Do you feel that the current fees charged to obtain probate are excessive? Well, you could be in for a big shock over the coming months if the proposals from the Ministry of Justice are enacted.
In order to raise an additional £250 million for the courts service, the MoJ is asking for a large increase in the fees payable after death. The fees are currently fixed at either £155 or £215: however, if the increase is enacted the biggest estates could end up paying as much as £20,000 for probate. Understandably, the proposed increase has been criticised as “astronomical” by lawyers. However, the MoJ has said that under the proposals, most people – including the less wealthy – will pay less.
So what’s the current position for probate? Well, at the moment probate fees are chargeable on any estate worth more than £5,000. Under the new proposals the threshold figure will rise to £50,000. According to the MoJ therefore, if the proposals get the green light 57 per cent of estates will therefore pay nothing. However, anyone with an estate worth more than £50,000 will be forced to pay considerably more. Those with estates worth between £50,000 and £300,000 will pay £300: anyone with an estate worth more than £2 million will pay a maximum of £20,000.
Proposed Probate Fees
Value of estate
|Less than £50,000||£0|
|£50,000 to £300,000||£300|
|£300,000 to £500,000||£1,000|
|£500,000 to £1 million||£4,000|
|£1 million to £1.6 million||£8,000|
|£1.6 million to £2 million||£12,000|
|Over £2 million||£20,000|
Charles Hutton, a partner at Charles Russell Speechlys, a company which specialises in tax and estate planning, said that the planned fees were “staggeringly high”, and was little more than a back door-increase in Inheritance Tax. He also told the BBC:
“It is very likely that in the case of married couples the fees will have to be paid both on the first death and on the second death. This would be up to £40,000 in total for estates valued at the higher end of the new fee scale, which is astronomical.”
A spokesman for the Ministry of Justice rejected such claims and defended the plans, saying:
“Court fees are never popular but they are necessary. We have got to make sure our courts and tribunals are properly funded at the same time as cutting the budget deficit,” he said.
The government will consult on the proposals between now and April.