Probate fee rise ‘a new tax on bereaved families’
STEP has condemned the sharp increase in probate fees due to come in this May as a new tax on bereaved families.
The new fees will now be pro-rata, and apply to all estates worth GBP50,000 and over. An estate of GBP300,000-GBP500,000 will now pay GBP1,000, and estates of GBP2 million or more will pay as much as GBP20,000.
This represents an extraordinary increase over the current fees, which are GBP155 if made by a solicitor, and GBP215 if made by an individual, whatever the value of the estate.
A consultation set up by the Ministry of Justice was met with strong opposition from STEP and many others. You can view the government's response, and STEP's full comments on the consultation via the links below.
As STEP Chief Executive George Hodgson said: ‘STEP is very disappointed that the Ministry of Justice has decided to ignore the view of both STEP and the overwhelming majority of respondents to this consultation and press ahead with what represents a new tax on bereaved families.
‘In many cases the probate "fee" will rise very sharply indeed. A family with an estate worth just over GBP1 million, not at all unusual given the current housing market, will not only have to pay a large inheritance tax bill (GBP270,000), but then pay an additional probate "fee" of GBP8,000, as opposed to the current fee of GBP155.
‘This is back door taxation and we note that there is not even an attempt in the MoJ’s response to justify the fairness of these new charges.’
STEP notes that the proposed fees bear no relation to the cost of processing the application, and appear to be intended to subsidise other civil claims, which, unlike probate fees, are voluntary.
In addition, paying a fee running into thousands will be hugely problematic for law firms, which normally pay such fees up front on behalf of the executors. Obtaining funds will only incur further cost and delay, and add to the stress of bereaved families. Many will have no choice but to sell their homes.
- Government response to the consultation on fee proposals for grants of probate, 24 February 2017
- STEP comments on the consultation on fee proposals for grants of probate dated 18 February 2016 by the Ministry of Justice
For further information please contact Joanna Pegum on +44 (0) 20 3752 3771, Email: [email protected].
STEP is the global professional association for practitioners who specialise in family inheritance and succession planning. STEP works to improve public understanding of the issues families face in this area and promotes education and high professional standards among its members. STEP members help families plan for their futures, from drafting wills to issues surrounding international families, protection of the vulnerable, family businesses and philanthropic giving. Full STEP members, known as TEPs, are internationally recognised as experts in their field, with proven qualifications and experience.
Find out more at www.step.org.