Tax  

Probate fee shake-up will take place in May

Probate fee shake-up will take place in May

Government websites have been updated to state the increase in probate fees will be introduced from May 2017.

From May the flat rate fee of £215 (or £155 if using a solicitor) will change to one which is tiered based on assets. 

The change will mean lower value estates are exempt from any charge, but the charge on estates which exceed £50,000 will increase – some quite dramatically.

Those with assets of more than £1m will have to pay probate fees of between £8,000 and £20,000. 

With the rise in house prices, Gordon Andrews, financial planning expert at Old Mutual Wealth, warned this could impact a growing number of people.

He said it was questionable whether the size of someone’s estate determined the amount of work required by the courts. 

So he said simply creating a fee structure based on estate value would doubtlessly create a system where higher value cases fund the probate service for low value cases.

Mr Andrews said: “It is disappointing the government plans to press ahead with the new fee structure for grants of probates despite wide-scale concern from the industry.  

“The move from a flat rate fee structure to one which is tiered based on assets could, in theory, have been an acceptable model, but the level of fees imposed are arguably unjustified.

“At its crudest, one could argue that this is yet another stealth tax being levied by the government, which can add up to 1 per cent in fees on the value of an estate.

“These proposed changes will add further complexity to estate planning.”

George Hodgson, chief executive of Step, which is an association for practitioners who specialise in family inheritance and succession planning, said the changes represent a new tax on bereaved families.

He said: “This is back door taxation.”

emma.hughes@ft.com