A new tax in wolfs clothing? – The Probate Fee Hike

Grieving Families are again facing a substantial increase in Probate Fees which is due to take place next month (April 19). In 2017 the Government announced similar increases. The increases were not to assist the running of the probate service but were to be utilised throughout the Court and Tribunal system, the increases were therefore seen as an unfair tax on death. The increases became known as the “Death Tax” but these were pulled at the 11th hour. The increases again have become resurrected and we are told they will come into existence in April 2019 (the exact date still not being know at the time of writing this article).

Currently there is a flat rate for probate fees £255 (for those applying without a solicitor) and £155 (for those applying through a solicitor. This fee remains the same regardless of the size of the estate. However the new reforms will exempt people with estates worth less than £50,000 from and fees at all but will significantly increase the fees on a sliding scale.

For Estates valued between £50,000 and £300,000 the new fee will be £250. If the estate is valued between £300,00 and £500,000 the rises by 384% to £750. Then between £500,000 and £1million the increase is 1513% to £2500 but the hefty increase will be for estates in excess of £2million where the probate fee increases by 2690% to £6000. Is this actually a stealth tax on our wealthier citizens?

Now we may all be cynical and say that if an estate is worth millions then more should be paid by way of fees, but why? As the probate office process is the same as in producing a Grant of Probate then if it was dealing with an estate worth £51,000. For higher valued Estates there may be additional works for the Executors to value the estate, and more works to complete for the full Inheritance Tax for forms, but neither of these impacts the works of the Probate office or the Court System so there is no justification for the increase.

We all know that increases in Tax do not increase popularity for politicians and any tax rise has a stringent parliamentary process to be followed, debated and voted upon by both Houses. However, by classifying the increase as a fee allows the passing of the increase by a “statutory instrument” which allows for lesser parliamentary scrutiny as a result the changes were approved by the delegated legislation committee and are pending implementation and national rollout. It is estimated that the increase in fees will raise £145 million in the next financial year.

There is petition currently running to attempt further debate https://petition.parliament.uk/petitions/232192 
Increasing the Probate Fee is not popular move and the Law Society has been urging its members to lobby MP’s,  however given the current political climate Probate Fees are not at the forefront of peoples priority and unfortunately the impact of the fees will only become apparent after the loss of a loved one.

For further information or help and assistance with all aspects of the Probate, Dawsons Law can provide one off advice or assist you through the whole probate process. Call 01603 327280 to book an appointment and gain peace of mind, locally. Dawsons Law is proudly a firm at the heart of your community.