A significant rise in Court fees for applying for a Grant of Probate is on the horizon to help fund the wider Courts and Tribunals Service.
Currently, there is no fee for applying for Probate for estates worth up to £5,000, and a flat fee of £155 for estates over this threshold where solicitors make the application on the executors’ behalf.
But if proposed fees (below) recently approved by the government receive parliamentary approval, it is expected that a huge rise in the application fee will come into force in May 2017.
|Value of net estate (before inheritance tax)
|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
For larger estates, clearly the proposed new fees represent a huge increase and some estates are likely to experience difficulties in paying the fee, for example where assets cannot be liquidated before a Grant has been obtained. The Government’s suggestions that, in these instances Executors might pay the fee out of their own pockets and be reimbursed at a later date, or that beneficiaries might assist, raise as many questions as they do answers.
There is also concern that to avoid the larger fees individuals might feel pressure to dispose of assets unwisely during their lifetimes, or that executors may fail to deal correctly with the administration of an estate.
It is not clear yet whether the fees will apply to all applications received after the fee increase, or only those where the deceased died after that date. It also seems that the government will not treat the fee as an expense which can be deducted from the estate for inheritance tax purposes. Given that the service provided by the Probate Registries is purely administrative, and the work required for a £20,000 fee is unlikely to be any different from that for a £300 fee, no doubt many will see the hike as a further tax on death.
We will monitor the proposals and provide an update once further information is made available, but if you have any questions, please contact the partner having responsibility for your affairs or any partner in the Private Client Department.