The government has scrapped plans to increase probate fees to as much as £20,000, saying there would not be time before the general election on the 8th June.
The fee payable to the Probate Registry when applying for a Grant of Probate when someone has passed away is currently £215 for a personal application or £155 where a solicitor is applying.
The plans that were due to be implemented this month would have replaced the current flat fee for applications to a system based on the value of the estate ranging from £300 to a maximum of £20,000 for those worth over £2m.
A spokesperson from The Ministry of Justice announced: “The relevant statutory instrument will now not have time to go through the parliamentary process before the election. It will now be a matter for the new government.”
Many had hoped that the fee hike would raise £300m a year for running courts and tribunal service but critics had branded it a ‘stealth death tax’.
The increase was recently challenged in court on the basis this was a tax in all but name. The Ministry of Justice stated it would appeal and that the fees were still to be implemented, but this now appears to have been overturned in light of the upcoming election.
DTM Legal Associate, Amanda Bailey, said: “It has been a very busy time for probate practitioners rushing to try and get applications in before the fee increase. This announcement gives some respite but it is still a possibility that fees will be introduced in the not so distant future.
“The proposed increase would have the biggest impact on business owners and farmers. Business and agricultural assets generally qualify for inheritance tax relief, reflecting the reality that these individuals are often ‘asset rich but cash poor’! Funding the cash to meet a 40% inheritance tax on a £2m farm, for example, would be very difficult for a large majority of farmers which is the rationale for the exemption.
“The new probate fees however would be based purely on value with no reliefs available to offset. This could result in a £20,000 fee needing to be paid just to get the Grant of Probate.”
Amanda added: “It is difficult to give firm advice on how to mitigate this while we are unsure if or when the fee hike will be implemented. The first initial piece of advice would be to have your wills renewed and the second to potentially look at ensuring jointly held property is held as ‘join tenants’ to prevent the need for a Grant of Probate to deal with the asset upon death. However this can come with its own pitfalls so professional advice before making any changes is strongly recommended.”
Contact Amanda Bailey on 01244 345805 or e-mail email@example.com for a free, no obligation review of your wills and affairs.