Proposed Probate fees increases from May 2017 – significant and unjustified?
Stephanie Tam for
Probate fees will change from May 2017 whereby the fees will reflect the value of the estate. Anyone with an estate worth more than £50,000 will pay considerably more. For estates worth between £50,000 and £300,000 will pay £300 to get a Grant of Representation or Grant of Probate, estates worth £2 million or more will have to pay £20,000 to execute the wishes of the deceased’s will.
Currently, a flat probate fee of £155 applies if probate is applied through a legal representative, and £215 for applications by members of the public. Following a consultation on 18 February 2016, the cost will move in line with the value of the estate before inheritance tax bill and exemptions are applied.
Whilst the level of the proposed Probate fees is seen as disproportionate when compared to the current fee of £155 and £217, on the face of it this may seem to some to be proportionate and fair as the process and cost to the Probate Registry is the same for all applications at present. Although the Government stated that it understood concerns over the level of the proposed fees, the increases are necessary to fund the courts and tribunal systems in the long term.
The UK Land Registry will insist on sight of a grant if land is to be transferred from a deceased sole owner into the names of the personal representatives, if personal representatives are to sell the deceased owner’s land or transfer the land into the name of an heir.
These fee changes may, on the other hand, encourage married couples to consider owning assets jointly. This means when the first death occurs, assets pass automatically to the surviving spouse by survivorship. Owing to the fact that no grant is needed and thus no probate fee incurred. However, this may raise issues of conflict with tax planning. Further, this may not provide sufficient protection for some couples as they may want their share of jointly owned assets to pass to someone other than the surviving spouse after the first death and could still result in a grant being needed.
As the probate fees must be paid when access to assets, there are concerns about how an executor of a will can be expected to find funds to pay for the Grant of Probate and funds is limited. This could potentially lead to hardship for Personal Representatives. Despite 83% of those consulted disagreeing with the proposal, the Government’s proposals are set to come into effect from May 2017.
Probate fees are set to rise from May 2017 onwards, a fee scale based on the value of the assets in an estate will be applied as follows: –
|Value of estate||Proposed probate fee||Current probate fee||Increase|
|Below £50,000||£0||£215||No fee|
|£50,001 – £300,000||£300||£215||£85|
|£300,001 – £500,000||£1,000||£215||£785|
|£500.001 – £1m||£4,000||£215||£3,785|
|£1,000,001 – £1.6m||£8,000||£215||£7,785|
|£1,600,001 – £2m||£12,000||£215||£11,785|
The current system will be replaced by a sliding scale based on the value of an estate. It is the date of the application for a grant that will govern whether the new fees apply. The Probate Registry is gearing up for a marked influx of applications ahead of the proposed change.
If you need advice on how these changes may affect you and would like us to advise you on probate, why not give us a call to book an initial consultation meeting with one of our Solicitors?
Stephanie Tam for