Probate fees increase scrapped ahead of general election!
We are delighted to announce some good news about the Government’s recent u-turn to put a halt on the increase in probate fees that were due to take effect in May 2017. Following the announcement of the snap general election, the Government has decided not to proceed with the increase in probate fees but is this just a mere delay?
In February 2017, the Ministry of Justice (“MoJ”) announced a significant change to the probate fees in England and Wales to raise funds for the court and tribunal service. Currently, probate fees are set at a flat fee of £155 if you apply through a solicitor, or £215 for a personal application. However, under the proposed changes a “banded system” based on the value of your estate would have replaced the current flat fee and the new structure would have consisted of the following:
|Value of estate||Proposed fee|
|Up to £50,000||£0 (exempt from requiring a grant of probate)|
|Between £50,000 - £300,000||£300|
|Between £300,000 - £500,000||£1000|
|Between £500,000 - £1m||£4000|
|Between £1m - £1.6m||£8000|
|Between £1.6m - £2m||£12,000|
|More than £2m||£20,000|
The Government has been evasive as to whether the proposed changes may be back on the menu if the prime minister is re-elected. If the proposed changes should return, the new banded system will mean that some estates – particular higher value estates - will be paying far more than they currently do.
The proposed changes faced fierce criticism with some commentators contending that the proposals were excessive and likely to have a disproportionate impact on both the estate and the executors administering the estate, particularly where an estate is asset rich but cash poor. Others advocated that the hike in fees were a form of taxation requiring Parliamentary approval, and that the changes could result in older people feeling obliged to give away assets during their lifetime just to avoid the charges - leaving them with insufficient assets to provide for themselves.
Indeed, just before the announcement of the snap general election, the proposed changes were severely criticised by the House of Commons Joint Committee on Statutory Instruments. The Committee confirmed that there should be “no taxation without the consent of Parliament” and found that the proposed changes were in fact a tax (not a charge) and as such should be subject to parliamentary scrutiny.
So even though the government’s position is at least good news for now, this does not mean that these proposed fees have been forgotten. It is far from clear if the proposed increase in fees has been scrapped entirely, or whether they are just being delayed until the outcome of the general election. However, should the proposed changes return it is likely that a challenge in the courts will be pursued given the position of the House of Commons Joint Committee on Statutory Instruments.
If you would like more information about the probate process, please contact Tony Calwell, or Lisa Morgan on 0117 9390 350. At Watkins our experienced legal team is here to offer a helping hand, including initial advice, assistance with the probate process or we can take responsibility for the whole process on your behalf.