You may have seen the news recently that Probate Registry court fees will change in May to a banded system based on the value of the estate. The fees in some cases will increase from the current flat rate of £155 to £20,000! (the table below shows the full details)
Whilst the need for change may have been acceptable, the level of fees imposed are arguably unjustified which has caused anger within the industry. Particularly in view of the government’s admission that the Probate Registry was already self-funding on the existing fee structure and that of the 829 respondents to the consultation only 63 agreed with linking the fees in this way.
The fees are required to be paid upfront i.e. before the grant of probate and many are concerned as to how the fees are to be funded. The government’s paper states that executors or beneficiaries may have to loan the estate the money; this is easier said than done when the amounts we are referring to are in the thousands.
For many this is being viewed simply as an additional death tax.
However, unlike inheritance tax (IHT) this fee is irrespective of who inherits the estate i.e. spouses and charities who are currently exempt from IHT will still be required to pay the probate fee.
This could mean, for example, a widower where the estate comprises mainly of the family home having to raise thousands of pounds simply to get probate for transferring an ISA.
The worry is that this may lead people to make very unwise decisions with regards to their assets and estate planning, such as the inappropriate use of trusts, or placing assets into joint names. It will also give fuel to the fire for unscrupulous sales based firms providing schemes that promise to save thousands but never actually work.
As ever it is imperative that people get proper qualified advice so that they can understand the options available and what is the best for their circumstances.
Probate Registry Court Fees as of May 2017
- £0 for estates under £50,000
- £300 for estates worth more than £50,000 and up to £300,000
- £1,000 for estates worth more than £300,000 and up to £500,000
- £4,000 for estates worth more than £500,000 and up to £1 million
- £8,000 for estates worth more than £1m and up to £1.6 million
- £12,000 for estates worth more than £1.6m and up to £2 million
- £20,000 for estates worth more than £2 million