The government has resurrected plans which were dropped ahead of the 2017 general election for a sharp hike in probate fees on bigger estates. A sliding scale based on the value of the estate will replace the current flat rates, but the wealthiest estates will pay 70% less than originally planned after last year’s outcry over a new ‘stealth tax’ persuaded ministers to reconsider. 

At present the fee for probate is a flat £215 for individuals and £155 for those applying through a solicitor. Estates valued at under £5,000 are exempted.

In a written statement this afternoon, justice minister Lucy Frazer said that under a new banded structure the maximum fee will be £6,000, payable on estates worth more than £2m. This is a 70% reduction on the £20,000 cap planned for this category last year.

As it proposed in 2017, the government will increase the value threshold from £5,000 to £50,000, lifting an estimated 25,000 estates annually out of fees altogether. About 80% of applicants will pay £750 or less, said Frazer. 

Last year’s plans would have resulted in a probate fee for some estates amounting to up to 129 times more than the current rate. On that proposed scale, estates worth between £1.6m and £2m would have been subject to a £12,000 charge. 

Laying the revised legislation before Parliament, Frazer stressed that all the money raised from the new fees will be spent on running the courts and tribunals service. This will amount to an estimated £145m a year from 2019/20 and £185m in 2022/23. Last year’s proposals were expected to raise £250m per year.

Frazer added: ’We have listened closely to concerns around early proposals. Fees will never be more than 0.5% of the estate’s value, and are recoverable from the estate. Fees will be set at a level to ensure that they will only be paid by those who can afford them, with all income going directly to our courts and tribunals – ensuring justice is done, and protecting victims and vulnerable people.’

Today’s statement adds: ‘Fees are an essential element of funding an effective, modern courts and tribunals service, thereby ensuring and protecting access to justice. This includes introducing changes to our Probate Service, who offer an important service to those who are bereaved.’

The Law Society responded by accusing the government of ’increasing inheritance tax by stealth’, protesting that the changes will avoid parliamentary scrutiny as they will be introduced through statutory instrument. 

President Christina Blacklaws said the suggestion the money would be fed back into the courts system was ’simply an attempt to distract from wider problems’, adding: ’The government had an opportunity at the budget just last week to increase funding for the justice system after almost a decade of austerity. Instead they chose to continue cuts which have seen thousands denied the ability to access.’

Lakshmi Turner, chief executive at Solicitors for the Elderly, said the ‘stealth tax’, although much lower than before, is still unjustifiable as the probate process will not require additional work or resources no matter the size of the estate.

‘It’s extremely unclear how the executors will pay the probate fees and there remains a lot of unanswered questions around how the money will recovered from the estate, as assets are frozen until the executors receive the grant of probate,’ she said.

Turner added: ‘There will be older and vulnerable people with estates or properties that have grown in value over their lifetime, so it seems an unfair system. Not every probate application is simple, so we would highly recommend that people seek specialist legal help at this distressing time.’

Law Society president Christina Blacklaws said: ‘The last time the government proposed a change in fees there was widespread condemnation from both the legal profession and consumers. To make it worse, the government is proposing to avoid the scrutiny of parliament by introducing the changes via statutory instrument. They can call it a service charge or a graduated fee, but what it amounts to is an additional inheritance tax.’

The MoJ said it will publish a guidance document before the Statutory Instrument comes into force.

Private Client Section: cross border conference 2019, SRA Competence: A2, 7 March 2019, Chancery Lane London

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