Probate fees scheduled to rise dramatically
Update: As of 21st April 2017, these changes have been cancelled, as the government will not be able to introduce them before the General Election 2017. We expect that, in the event of a Conservative government being elected, these changes would be reintroduced soon after the election.
The Government has announced broad changes in probate fees depending on the value of the property left by an individual in their will.
These changes will see those with estates valued above £2m bound to pay £20,000, which is a significant increase on the current fees of £155 (for applications through a legal representative) or £215 (for applications by members of the public). Such a jump may force increasing numbers of property owners to take a loan in order to pay these fees.
How much will your estate pay?
According to a Government estimate, approximately 58% of estates are valued at less than £50,000, which means that under the new rules they will not be required to pay any probate fees. If an estate exceeds this threshold but its value is no more than £300,000 then a fee of £300 will need to be paid. The full proposal can be seen in the table below.
|Value of estate (before inheritance tax is deducted)
|Proportion of all estates in England and Wales
|Up to £50,000 or exempt from requiring a grant of probate
|Exceeds £50,000 but does not exceed £300,000
|Exceeds £300,000 but does not exceed £500,000
|Exceeds £500,000 but does not exceed £1m
|Exceeds £1m but does not exceed £1.6m
|Exceeds £1.6m but does not exceed £2m
Under the proposed changes, no estate will pay a fee that is more than 1% of its value, 92% of estates would pay £1,000 or less, 98% would pay £4,000 or less and less than 2% of estates would pay £8,000 to £20,000.
Approximately 84% of those consulted disagreed with the Government’s proposal; this shift from a fixed fee to one that will be proportional with the value of the estate. However, the Government is determined to overhaul the probate fee system. The new probate fees are planned to come into effect from May 2017.
Asked if they agree with the new scaled system (detailed above), almost 97% of those consulted were against it, some of them saying that the increase from current fees is too great and will disproportionately affect those estates that are “cash poor, asset rich”.
With that being said, the Government has ignored overwhelming opposition and decided to move forward and implement their proposal.