Return of the Probate Tax: What does it mean?

The government has announced that it has resurrected its 2017 plan to implement an enormous increase in probate application fees for higher-value estates in England and Wales.

While the new plan will impose fewer punitive charges than when was first announced in February 2017, the new banded fee system will replace the current £215 flat fee with charges based on the value of the estate.

How are probate fees paid?

Traditionally, probate fees are paid upfront, before the grant is issued. This is something that may be feasible with a £215 fee, but harder when the cost is increased to £6,000. This could have a considerable impact in parts of the country that have seen property price spikes in recent years.

Announcing the revised plan, Junior Justice Minister Lucy Frazer said the fees would be used to fund the current comprehensive reform of the courts and tribunals system.

Frazer also assured executors that a new guidance document, Guidance on Ways to Pay for Probate Fees, would outline several options to fund the fee from the estate. The guide is set to be published before the new rules come into force. The statement from the Justice Minister also stated that the cost of the fee is recoverable from the estate, however there are still a lot of questions as to how this will work in practice, particularly where estate assets are generally frozen until the grant is obtained.

The government’s previous plan was dropped last year after the House of Commons Joint Committee on Statutory Instruments warned that the then-proposed new fee structure was unlawful, but that legislation was dropped before the matter could be resolved. The government insists it is acting within its powers, but STEP has obtained a legal opinion, which confirms that, given the tax nature of this measure, this is an abuse of the parliamentary process.

How Barcan+Kirby can help you

If you need professional advice about dealing with the affairs of your estate, you can speak to our probate lawyers in Bristol and South Gloucestershire.

Click here to request an estimate for our probate services. Alternatively, call us on 0117 325 2929 or complete our online enquiry form.