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Probate fee proposals could mean millions pay more


Millions of people will be required to pay an increased fee when they die, if new proposals from the Ministry of Justice go ahead.

The Ministry of Justice want to raise an extra £250m for the courts service and they have proposed that people should pay up to £20,000 in probate fees when they die, depending on the size of their estate.

Probate is a legal process that is carried out by the courts when a person dies and leaves behind a will and last testimony. The process is essentially the first step in validating a persons will, so that the estate can be shared out as the deceased has requested.

Currently, a person with an estate of more than £5,000 has to pay a fixed probate fee of either £155 or £215. This will be means tested under new proposals, based on the total value of the deceased’s estate.

If the proposals go ahead, then the minimum value of estate before a probate fee is applicable will increase from £5,000 to £50,000 meaning that 57% of estates will pay nothing. However, any estates worth more than this will be subject to a considerably higher probate fee.

The proposed fees will be structured in bands based on the following value of the estate:

  • Less than £50,000: No probate fee applicable

  • 50,000 to £300,000: £300

  • £300,000 to £500,000: £1,000

  • £500,000 to £1m: £4,000

  • £1m to £1.6m: £8,000

  • £1.6m to £2m: £12,000

  • Above £2m: £20,000

‘Astronomical’ increase

Whilst the majority of people will no longer be required to pay a probate fee, those with a higher value estate will have to pay a much larger fee, and in some cases the fee could rise by over 9,000 per cent.

This has led some industry stakeholders to heavily criticise the move as a way of increasing inheritance tax through the back door.

Charles Hutton, from Charles Russell Speechlys, a firm that specialises in tax and estate planning was one of those who spoke out against the Ministry of Justice. He said that the proposed fees were ‘staggeringly high’.

Mr Hutton also said: "It is very likely that in the case of married couples the fees will have to be paid both on the first death and on the second death.
"This would be up to £40,000 in total for estates valued at the higher end of the new fee scale, which is astronomical."

Despite coming in for heavy criticism, a spokesperson for the Ministry of Justice defended the plans as ‘necessary’.

The spokesperson said: "Court fees are never popular but they are necessary. We have got to make sure our courts and tribunals are properly funded at the same time as cutting the budget deficit.”

Whilst the move is not yet confirmed, the government will be consulting on the impact of the proposals ahead of this April.

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