New probate court fees to be abandoned… for now

Posted by Alison Craggs on
The Ministry of Justice has abandoned its controversial plans to substantially increase probate court fees. 

The increase in probate fees which was due to come into effect in May would have seen, in the most extreme cases, beneficiaries of estates worth more than £2 million pay probate fees of £20,000 rather than the flat fee of £155.

The changes had been projected to raise an additional £300 million a year for the Government. It was argued that the higher fees were needed to fund the courts and tribunals service.

The proposals were contained in the Non-Contentious Probate Fees Order 2017 (the order). Such instruments allow a parliamentary act to be made or altered without a vote by MPs. MPs and peers had questioned whether the changes were legal in that they were a 'tax' rather than a 'fee'. Organisations such as the Society of Trust and Estate Practitioners (STEP) had expressed concerns about the proposals, on grounds of fairness, practicality and legality. There were also comments that the fees were far in excess of the amount necessary to cover the cost of the service. People argued that it does not cost 20,000% more to process the application for a grant of probate for an estate worth £2 million than an estate worth £30,000 – the Probate Officer's job is the same.

About half of deaths in England and Wales need an application for a grant of probate. This is a court order which proves that a person, usually the executor under the Will, has authority to deal with the assets of the deceased's estate.

The probate fee is in addition to inheritance tax, which is levied at 40% on estates above the inheritance tax threshold.

At the other end of the spectrum the new system would have raised the threshold below which no fee was payable from £5,000 to £50,000. This was estimated to lift some 30,000 estates out of paying any fee – sadly that will no longer be the case.

The Ministry of Justice has said there is not enough time for the legislation to go through Parliament before the general election on 8 June 2017. What remains to be seen is whether the scheme will be brought back in the next Parliament or abandoned all together.

The news comes a little too late for probate lawyers, who have been working to make sure our estates, especially the larger ones, had probate applications in this month before the new fees were planned to take effect. Staff at the Probate Registry probably also now need to process an unusually high volume of cases!

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Alison advises clients on the best structure for their Wills and prepares powers of attorney and administers estates. 

Alison Craggs
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