The Ministry of Justice has confirmed it will go ahead with plans to substantially increase probate fees.
Its proposals will mean anyone inheriting an estate worth more than £2m will pay charges of £20,000.
From May this year the MoJ will introduce a sliding scale of charges for probate fees, which previously cost £215.
Estates worth between £1.6m and £2m will be charged £12,000 and only those below £50,000 will be exempt from charges.
Sarah Phillips, a partner at Irwin Mitchell Private Wealth, said the new rules were effectively a new tax that will hit property owners who are asset-rich but cash-poor, and rural families with small farms.
She said the most effective way for families to avoid the new charge is to ensure couples own their homes in joint names or as tenants in common or write assets into a trust.
Ms Phillips said: “Individual beneficiaries, who are asset-rich but cash-poor, would be badly affected by the need to raise such considerable sums to obtain probate.
“Many will have no alternative but to go to the expense of a bank loan to pay the fee.
“Unless the house is being sold, it then leaves a problem as to how the loan is repaid.
“Older people will feel the need, or be pressurised by families, to give away assets in their lifetime, to avoid these high charges.”
Estates valued between £50,000 and £300,000 would only have to pay £300 but this escalates to £1,000 for estates valued between £300,000 and £500,000 and then £4,000 for those between £500,000 and £1m.
In a recent consultation on the proposals, the MoJ received 829 responses with only 63 respondents agreeing with the proposal.
Confirming the proposals, the MoJ said: “As the Lord Chancellor, Lord Chief Justice and Senior President of Tribunals said in their joint statement of September 2016, we have a justice system that is the envy of the world, but we must continue to invest in it to ensure it remains just, proportionate and accessible.
“In order to uphold those principles, it is vital that HMCTS continues to be properly funded.
“There is a real and tangible benefit for the general public that HM Courts & Tribunals Service is properly resourced and continues to offer people confidence in resolving their personal and professional affairs.”
damian.fantato@ft.com
