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Changes to Probate Fees – Probate fees set to increase

May 08, 2019

Following the Government´s announcement in November 2018, probate fees were expected to increase last April 2019. However, the proposal is still awaiting approval from the House of Commons and a date has not been fixed for this.  It is however expected that the changes will come into effect 21 days after the proposal is approved. Laura Ramos, Trainee Solicitor in the Private Client department, explains what these changes are and how they can affect you.

The Government announced a new fee structure for probate fees, which was due to come into force in April 2019. However, the exact date is yet to be confirmed.

Personal representatives, a generic term that includes executors (if appointed by a Will) and administrators (if the deceased died without making a Will), are the individuals responsible for dealing with the estate of a deceased person, which involves collecting and distributing the deceased´s assets and settling the deceased’s debts. A Grant of Representation can be either a Grant of Probate or Grant of Letters of Administration, depending on whether the deceased died with or without making a Will. The Grant of Representation will give personal representatives authority to deal and manage the deceased´s estate.  Whether a Grant of Representation is needed will depend on the value and assets of the estate.

In order to obtain Grant of Representation, probate fees need to be paid in advance. At present, the fees paid for probate are fixed, regardless of the value of the estate. The current fees are £155 for applications made by solicitors and £215 for applications made by individuals. However, this may change soon.

The Government’s proposal

The Government´s proposal is to introduce a banded fee structure based on the value of the estate as set out below:

Value of estate (before Inheritance Tax)

Proposed fee

Up to £50,000 or exempt from requiring a grant of probate

£0

Exceeds £50,000 but does not exceed £300,000

£250

Exceeds £300,000 but does not exceed £500,000

£750

Exceeds £500,000 but does not exceed £1m

£2,500

Exceeds £1m but does not exceed £1.6m

£4,000

Exceeds £1.6m but does not exceed £2m

£5,000

Above £2m

£6,000

 

However, the proposal has been heavily criticised and described as a “stealth tax” since the work in processing a Probate application does not increase with the value of an estate. The House of Lords stated that the new fee proposal is an “an abuse of fee-levying power”. Likewise, the Law Society added that “it is unfair and discriminatory to expect the bereaved to subsidise other parts of the courts and tribunal services”.

The Government intended this new banded fee structure to apply from April 2019, however the proposal is awaiting approval from the House of Commons and it is expected that the Labour Party will oppose it. It has been announced that the changes will come into force 21 days after the proposal is approved.

How can this affect you?

The fees to apply for Grant of Representation for an estate worth more than £2 million will be £6,000, which is an increase of £5,785 if the application is made by an individual. For estates worth between £500,000 up to £1 million, the fees will be £2,500, an increase of £2,285.

Executors will be responsible to pay probate fees, as well as any Inheritance Tax and/or funeral expenses. Since a Grant of Representation is often required to release funds and assets from the estate, executors may have to pay probate fees in advance from their own pocket. In order to avoid this, in addition to inheritance tax and care fees planning, the funding of probate fees will also need to be considered when drafting a Will.

How can we help?

Our Private Client department offers Wills, Probate, Tax & Trusts services, including making a Will, creation of trusts to protect assets, Powers of Attorneys and Inheritance and Tax planning.

If you have any questions or would like to find out more about how we can help, please contact a member of the team who will be happy to assist.

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Changes to Probate Fees – Probate fees set to increase

Laura Ramos

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