Probate fees will increase by up to £6,000 after MPs approved the hike following a committee hearing this morning (February 7).
MP members of the delegated legislation committee agreed with the Ministry of Justice’s view that the mandatory charge on the estates of deceased people was a fee for the provision of services, and not a tax.
If it were a tax, the plan to increase probate fees, which were first unveiled in 2016, would have to be included in the Finance Bill and so debated and voted on in parliament.
A fee increase does not have to be voted for by MPs.
The minimum fee will increase from £215 to £250 for estates with assets of less than £500,000, the fee is £4,000 for estates valued at more than £1m and £6,000 for estates worth more than £2m.
This charge is additional to inheritance tax.
Kay Ingram, director of public policy at adviser network LEBC, said: "This increase cannot be justified as the size of the estate has no bearing whatsoever on the work involved.
"This proposed leap in fees will make it impossible for some families to access their loved ones' assets without getting into debt and will add unnecessary stress at a time of considerable vulnerability."
Rachel Griffin, tax and financial planning expert at Quilter, said: "The good news is that although these changes will add further complexity to estate planning, there are still plenty of steps people can take to plan ahead.
"Using trusts can help reduce the value of an estate for inheritance tax purposes, meaning a lower charge will apply.
"People concerned about how beneficiaries will pay the probate fees could leave sufficient funds in a life insurance policy, and provided the policy is written in trust, it can be accessed immediately on death, without the need for probate."
david.thorpe@ft.com
