Probate application fee set to increase
Mar 10, 2017
The government has announced plans to increase the fees for applying for probate from 1 May 2017. Under the current system, applying for probate – which gives you the legal right to handle a deceased person’s estate – costs a flat fee of £215 regardless of the size of the estate, or £155 if you go via a solicitor.
This administration cost is now set to rise sharply, as the fee charged will be linked to the size of the deceased’s estate. If the estate in question is worth less than £50,000, it will now be exempt from charges altogether, removing 25,000 estates from the need to pay any fees according to the Ministry of Justice. However, all those people with estates worth over this amount will become part of a tiered system which sees fees rise up to £20,000:
|Value of estate||Proposed fee|
|Up to £50,000||£0|
|>£50,000 – £300,000||£300|
|>£300,000 – £500,000||£1,000|
|>£500,000 – £1m||£4,000|
|>£1m – £1.6m||£8,000|
|>£1.6m – £2m||£12,000|
These fees have to be paid up-front, as the assets of a will are not released until probate has been granted. If there are funds available in the deceased’s frozen bank account these funds can be used, but if they are insufficient or inaccessible, it means the executor or beneficiary will have to pay the probate fee themselves. This will present a huge financial burden for anyone already having to deal with the distress of bereavement.
The government has pressed ahead with plans to introduce this increase in probate fees despite 95% of respondents disagreeing with the initial proposals and calling it a ‘tax on bereavement’ and a ‘new inheritance tax’. It has also yet to make clear whether the changes will affect applications submitted after 30 April 2017, or whether they will apply to those who die after this date.
If you are currently administering an estate worth over £50,000, it is important to submit your application for probate before the fees increase on 1 May if at all possible. After the changes have taken affect, families with larger estates may want to consider ways to reduce the size of their estate before they die. Another solution for some estates may be to set up a probate trust, which allows beneficiaries quick access to funds and avoids the need to apply and pay for a grant of probate.
If you have any queries about how to make your estate more tax efficient, please contact us and we’ll be happy to help.