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Drastic rise in probate application fees proposed
The Ministry of Justice has proposed a new structure for probate fees. This includes increasing probate fees for estates worth over £2 million by 129 times the current fee.
Probate application fees must be paid before the personal representative’s authority to deal with the deceased’s assets will be confirmed by the Probate Registrar. These fees must be paid whether or not the deceased left a Will.
The current fee for applying for a Grant of Probate (where the deceased left a Will) or Letters of Administration (where the deceased died without a Will) is £215 for individual applications and £155 for those applying for probate through a solicitor with no fee being due if the estate is worth less than £5,000.
The proposed fees are as follows:
|Value of Estate||Proposed Probate Application fee|
|Up to £50,000||Exempt|
|£50,000 – £300,000||£300|
|£300,000 – £500,000||£1,000|
|£500,000 – £1m||£4,000|
|£1m – £1.6m||£8,000|
|£1.6m – £2m||£12,000|
|Over £2 million||£20,000|
The MOJ hopes to raise an extra £250 million a year through this fee increase. They also estimate, however, that an additional 30,000 estates will be exempt from paying a fee.
No exact date has yet been given for implementation of the new fees although the MOJ says that reforms will take place between 2016 and 2020.
What has not yet been made clear is whether banks holding cash on behalf of the deceased will be permitted to release funds direct to the Probate Registry in settlement of the application fee (as can currently be arranged for payment of Inheritance Tax in similar situations) or whether the personal representatives or family members will need to find other ways of raising the cash needed.
Whilst a Grant of Probate or Letters of Administration are not required in all cases, what remains clear is that this proposal is almost certain to put additional pressure on families with sizeable estates where the value is not held in readily accessible assets. A surviving wife whose husband’s estate was mainly represented by a substantial family home, for example, may now be faced with finding fees of up to £20,000 before being able to transfer ownership of the home. Similarly, children looking to keep a family business in the black may need to look to their own resources to raise the necessary funds to allow them to deal with their parents’ estates should cash not be available elsewhere.
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