Hike in probate fees set to go ahead - Legal Comment
After a recent meeting of the House of Commons Scrutiny Committee, probate fees are set to be hiked up to £6,000 for the largest estates as the government plans to overhaul the death tax from April 2019, a measure delayed from 2017 due to the early general election. Stuart Adams, Associate in Mishcon de Reya's tax team highlights the impact that this will have on the 'ordinary' person:
It has now been confirmed following a House of Commons Scrutiny Committee meeting that in England and Wales, probate fees – paid when administering someone's estate after they die – will now be payable on a sliding scale based on the value of the estate, rather than as a flat fee. Currently, for estates worth over £5,000, the flat fee is £215, or £155 if a solicitor makes the application. From April 2019, the threshold at which one must pay a fee is to be lifted to £50,000. However, if the value exceeds £50,000 (most estates involving property) there will be an increase in the fee paid. The maximum charge is £6,000 for estates worth £2m+.
The Ministry of Justice says the additional revenue will be used to fund the wider courts and tribunal service through an estimated £300m in additional income per annum.
This means the bereaved will effectively be subsidising other parts of the courts and tribunals service, even though they have no other option but to use the probate service. The fees will apply irrespective of who inherits the estate, unlike inheritance tax. So widows and charities will pay under the new regime.
The Law Society’s assessment of the proposal is that it amounts to a stealth tax and a misuse of the Lord Chancellor’s fee-levying power – a position that is shared by the Secondary Legislation Scrutiny Committee, the Joint Committee on Statutory Instruments, and the House of Lords.
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