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Probate fees hike expected from this May

01 March 2017

Update 21/04: Due to the upcoming general election, the plans to increase probate fees have been dropped. Please read this article for the latest update.

 

Subject to parliamentary approval, the Ministry of Justice has announced that it anticipates that probate court fees will substantially increase from this May, although the exact date is still to be confirmed.

The government plans to introduce a sliding scale of banded fees where the cost increases in line with the value of the estate, replacing its current flat fee system of £215 where a personal application for a grant of probate is made, or £155 for those applying via a solicitor.

What are the new fees?

The new banded system is structured as follows:

  • Estates worth under £50,000 will be exempt from any fee
  • Estates worth between £50,000 and £300,000 will be charged £300
  • Estates worth between £300,000 and £500,000 will be charged £1,000
  • Estates worth between £500,000 and £1 million will be charged £4,000
  • Estates worth between £1 million and £1.6 million will be charged £8,000
  • Estates worth between £1.6 million and £2 million will be charged £12,000
  • Estates worth more than £2 million will be charged £20,000.

Why will it increase?

It is reported that the increase in the fees is linked to an effort by the government to raise more money to fund the courts and tribunal service.

What does this mean?

We anticipate the effect of the increase in court fees will be widely felt and that a large number of estates will be caught. Whilst the government has calculated that under its proposals no estate will pay a fee that is more than 1% of its value and that the vast majority of estates will pay £4,000 or less (98%), in some cases the increase is as much as between 9,200% and 13,000%.

The fee will be payable to the court up front. This could prove problematic for some estates that are asset rich but cash poor and we will increasingly find that executors (or even beneficiaries) are being asked to either personally pay the court fee, and be reimbursed at a later date, or take out a loan to pay the fee.

The court fee is applicable on all estates valued at £50,000 or more, even those where no inheritance tax is actually payable.

Willans was one of only a handful of solicitors in Gloucestershire that objected to the fee increase by responding to the government’s proposals when they were announced last year. Despite this, the government has disagreed with the majority of those that responded to the consultation and are ploughing ahead with the changes.

Advice and assistance

If you require any advice on the effect of the increase in court fees on your estate and estate planning generally, our lawyers will be pleased to help you.

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Simon Cook LLB (Hons), TEP
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