New Forest

14/04/2019

Ministers give thumbs-up for probate revamp

Affluent families in England and Wales face paying probate charges of up to £6,000 in the coming months after ministers confirmed it as a fee rather than a tax.

Families have been used to paying flat fees of up to £215 to obtain the grant of probate needed in England and Wales to administer estates worth more than £5,000.

Critics had labelled the move as a “stealth tax”. Taxes are usually introduced in parliamentary bills, before going through a committee stage, and being voted on by MPs and Lords.

Ministers, however, circumnavigated this by classifying the charges as a fee, which saw the legislation narrowly approved by MPs and passed as a statutory instrument.

Instead of the flat rate, the proposed system sets fees on the following sliding scale based on the value of an estate. However, due to the delay of Brexit, these changes are yet to come into force. It is still intended for these changes to take place but it is possible that Parliament will delay their introduction.

Value of Estate before Inheritance TaxProposed Fee
Up to £50,000 or exempt from requiring a grant of probate£0
£50,000 - £300,000£250
£300,000 - £500,000£750
£500,000 - £1m£2,500
£1m - £1.6m£4,000
£1.6m - £2m£5,000
Above £2m£6,000

The probate changes have been in the pipeline for at least two years but were scuppered by Prime Minister Theresa May’s decision to call a snap general election in June 2017.

Back then, the proposed maximum charge on estates worth more than £2 million was £20,000.

Around 200,000 estates are expected to be liable to pay the new probate charges, despite being exempt from inheritance tax.

Lucy Frazer, minister of justice, said:

“The reform of the probate service aims to reduce the burden on applicants, by providing a more efficient and simpler application process.

“By raising the estate value threshold from £5,000 to £50,000, we will be lifting around 25,000 estates annually out of fees altogether.

“For those who do pay, around 80% of estates will pay £750 or less.”

For further information on Probate and Inheritance Tax, please contact Stacey Steele on 023 8046 1234.

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