The Government has announced this morning that they plan to introduce legislation to increase probate court fees for estates valued at over £50,000. Currently, there is a flat fee across the board of £155 if using a solicitor, or £215 if applying in person.
The proposal is to increase the court fee on a sliding scale, determined by the estimated value of the estate:
Estates worth less than £50,000 will pay nothing, meaning estates worth between £5,000 and £50,000 will save £215 compared to the current system.
Estates worth between £50,000 and £300,000 will pay £250, a rise of £35.
Estates worth between £300,000 and £500,000 will pay £750, a rise of £535.
Estates worth between £500,000 and £1 million will pay £2,500, a rise of £2,285.
Estates worth between £1 million and £1.6 million will pay £4,000, a rise of £3,785.
Estates worth between £1.6 million and £2 million will pay £5,000, a rise of £4,785.
Estates worth more than £2 million will pay £6,000, a rise of £5,785.
The previous attempt to increase the court fee was shelved in April 2017 due to the snap general election, but there was always concern among probate professionals that there would be a future attempt to reintroduce these very unpopular increases.
The probate fee has to be paid when applying for the Grant of Probate (or Letters of Administration for intestate estates) and before the estate can be gathered in and distributed; so while the executors will be able to recover the fees from the estate, this can only be done after Probate has been granted. This could potentially leave many families having to take out loans to cover the cost of the initial fee.
The increase is essentially a revenue-raising exercise to provide much-needed funds for the underfunded and oversubscribed HMTCS and is viewed by many probate professionals as a tax on the dead.
Lucy Frazer QC MP, Parliamentary Under-Secretary of State for Justice, said: “…by raising the estate value threshold from £5,000 to £50,000, we will be lifting around 25,000 estates annually out of fees altogether. For those who do pay, around 80% of estates will pay £750 or less, and all income raised will be spent on running the courts and tribunal service. We will also publish a guidance document before the Statutory Instrument comes into force, entitled Guidance on Ways to Pay for Probate Fees.”
Last year, the Joint Statutory Committee cast strong doubt on the lawfulness of introducing what is essentially a tax via a Statutory Instrument, the Committee said at the time;
"The Lord Chancellor is not permitted to impose a tax. Therefore, despite the arguments put forward by the Ministry of Justice, the Committee has a real doubt as to whether the Lord Chancellor may use a power to prescribe non-contentious probate fees for the purpose of funding services which executors do not seek to use – namely those provided by courts and tribunals dealing with litigation. Applying for probate is not to be compared with the commencement of proceedings. A person can choose whether to litigate, and therefore whether to incur the fees payable on issuing a claim – which may be recoverable from the defendant if the case succeeds. In contrast, executors have to obtain probate to allow them to administer an estate, and the fee for doing so is not refundable. This is an administrative process, akin to the registration of a life event. Nobody applying for an uncontested probate would think for a moment that they were engaging in litigation. That makes it difficult for the Committee to accept that a power to charge enhanced court fees can be extended naturally to require probate fees to reflect the general costs of the court and tribunal system."
George Hodgson of STEP sums it up beautifully: "And although the Government has reduced the charges, it has not dealt with the fundamental principle of using bereaved families to prop up the legal system."
The increased Probate Fee will come into force in April 2019.
Further reading – Probate Court Fee Hike Unjust and Unpopular
Taxed to Death – Bringing in the Punters
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