Potential increase in Probate Fees
A further death tax or a fairer way to charge?
On 22 April 2014 the Ministry of Justice (MoJ) increased court fees for probate applications through a solicitor by 244%, while personal applications rose by almost 105%. The current fee for extracting a Grant of Probate through a solicitor is a flat fee of £155 and by an individual £215. Whilst this hike in fees was jaw dropping for some, the proposed changes by the MoJ may seem like an unachievable mountain to climb.
The MoJ have now proposed to further amend the charging rate for probate fees which they say is based on the need to reduce the deficit in the Courts and Tribunals Services. This may see fees increasing by more than 129 times on the current fees.
The proposed new fee structure will be based on the size of the estate; you will pay nothing if it is under £50,000, then for those estates between £50,000 to £300,000 it will be £300, rising gradually so that it will be as much as £20,000 if the estate is above £2m. The government admits this is not about rebalancing a charge but about straightforward revenue raising.
Many solicitors pay the probate fee on behalf of the client from their own funds and then charge the fee as a disbursement in their invoice. However, this may not be an option if the proposals are implemented, as solicitors will be unable to fund fees at this level and therefore, the responsibility will be on the executors to find the money to pay the fee. How they will find the fee before probate is granted will be a question that needs answering.
The new banded fee structure has been said to be a fairer way of charging for the probate process, although some argue the work is the same no matter what size the estate is. It has been dismissed by some as being “preposterous” and “astronomical” and declared a new “death tax” by others. A consultation period is now underway.
We will keep you updated as to whether the proposals are accepted but if you have any queries regarding any probate issue you should contact us on 01282 422711 or email your enquiry to our Wills, Probate and Trusts department at firstname.lastname@example.org