Is the Probate ‘Death Tax’ justified?

Date: 2/8/2019

On Thursday 7th February, a Delegated Legislation Committee of MP’s met and gave the go ahead for an increase in Probate fees from April 2019.  Currently, the fee is £215, or £155 if families use a professional Executor such as a Solicitor or Specialist Law Firm.

Many are classing this fee increase as an unjustified ‘death tax’.  But is it a tax – or is it a fee?

Under the new system, any estate valued between £50,000 and £300,000, will pay £250, £300,001 - £500,000 will pay £750, £500,001 - £1M pay £2,500 with it being estimated that one in five families will fall into this category.  Estates between £1M and £1.6M will pay £4,000, estates valued at £1.6M - £2M will pay £5,000 and any estate worth £2m or more, the fee will be capped at £6,000.

Probate Scrabble

The whole issue is a contentious one.  It does not take the Probate Registry anymore time or work to give a Grant of Probate (the legal document that allows the Executors to distribute the estate in accordance with the deceased’s Will) to a small estate or a large one, so how can they justify the hike in fees? 

The more worrying issue is that the Executors will have to pay the fees up front upon application to the Probate Registry, meaning that many families will have to borrow the money, getting into debt, before they can begin to wind up an estate of their loved one - all at a time when they are most vulnerable. 

Reports suggest that the Ministry of Justice will reap an extra £185 million a year due to these increases.  The Law Society are said to be campaigning against the change as they feel these fees will hit grieving and vulnerable families with what they call a ‘stealth tax’. When challenged, the Ministry of Justice defended the move by insisting the fees were needed to plug a shortfall in the costs of court services for England and Wales.

The good news is that when the new fee scale comes into force, anyone with an estate valued at less than £50,000, will be exempt from all probate fees.

 

No Fees

£50,001 - £300,000

£300,001 - £500,000

£500,001 - £1 Million

£1M - £1.6M

£1.6M - £2M

£2M +

NOW

Under £5000

£215

£215

£215

£215

£215

£215

APRIL 2019

Under £50,000

£250

£750

£2,500

£4,000

£5,000

£6,000

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Wills & Legal Services Ltd
219/221 Worcester Road
Malvern, WR14 1SU

Also At:
112/118 Worcester Road
Malvern, WR14 1SU


01885 490380
Company Registered: 7744618.