It is troubling that it's possible that ministers may be giving some consideration to resurrect plans to increase probate fees by up to £20,000; despite these being quietly shelved due to the early General Election in May.
This comes despite the fact that there has been very little in the way of appetite either from lawyers or the general public with regards to the move. Many believe the move flies in the face of British aspirational values while also hitting the pockets of hardworking families and threatening both the financial and emotional legacies of older generations.
One disquieting thing remains certain, the government has never come clean and admitted that its “probate fees” were no such thing, but were, in fact, little more than a stealth death tax designed to help the Ministry of Justice raise £300 million a year for the underfunded courts system as a whole.
Are we paranoid for fearing a reappearance of the proposals? Well, anything is possible, but if we are paranoid here at Oratto, we are certainly not alone. For example, The Times newspaper has reported that the Institute of Legacy Management, and 12 other organisations concerned with probate and inheritance laws in the country, say they have no confidence that the government is not going to again try to push through with the increases.
“We are concerned that new fees would significantly reduce income for charities reliant on legacy gifts – to the tune of £18 million a year – because many organisations are struggling to meet increased demand for their services,” Legacy Management recently wrote in a letter to media.
In fact, for many interested parties, including the Society of Trust and Estate Practitioners, it is becoming increasingly difficult to shake the suspicion that the probate fee hikes, which would in some cases result in rises from £250 to £20,000, are still very much a part of the government agenda and will be introduced at the first politically convenient opportunity. It is also hard to shake the suspicion that when it does happen, it will happen stealthily.
Karon Walton, who works as a director of Solicitors For The Elderly, also shares this view and has said that she would find it surprising if the probate fee hike is not resurrected in some way, even if it is dressed up a little differently to the way it was originally proposed.
Perhaps the only shred of hope is the fact that the unexpectedly close election failed to result in the clear mandate the Tories were hoping for. As such it is harder for them to keep poker faced while claiming that the prospective charges are “fair and proportionate”. It would take some seriously risky politicking for the government to reintroduce the prospect of hikes any time in the immediate future given that so many top level figures in the government remain shaken by their unexpectedly poor performance in the election.
But in reality, the situation shows just how little trust probate lawyers and the electorate as a whole have in the government. We should not even be talking about it: in April a parliamentary committee dubbed the proposals as “unlawful’ and suggested that Liz Truss, then the Lord Chancellor and Justice Secretary, might have been reaching beyond the scope of her powers by trying to introduce them. It also said that the increases could more easily be characterised “as taxes than fees”.
However, the key finding of the committee was its view that the fees could even contravene the constitutional principle that taxation should never be enacted without parliament’s consultation. As such, it said, both houses of parliament should be consulted. “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,” said the committee, which was made up of twelve MPs and Peers, including five conservatives.
In our view, the fees are clearly a tax because they are determined by the value of an estate rather the cost of the work involved in the probate process by the courts; in effect the fees are being used as a cash cow for the court service as a whole. The government’s unwillingness to admit the fees would be a tax shows a blatant disregard and disrespect for both the electorate’s interests and its intelligence. This disregard is underlined by the fact that 97 per cent of respondents to a government consultation on the proposals said they were against the changes.
As Chris Millward, Institute of Legacy Management chief executive, says, “The probate fee rise, or stealth tax, has not gone away entirely. It is only dormant. It could be brought back at any time and with very little warning.” All of MPs, probate lawyers and the electorate should do everything they can do avoid fatigue or complacency on this issue should it again rear its ugly head.
Contact Oratto on 0845 3883765 to speak with an adviser or use our contact form to arrange a call-back.
