A House of Lords Committee has poured scorn on the government’s proposed ‘death tax’ on probate fees, mirroring comments it made the first time that incremental charges were proposed.
The Secondary Legislation Committee said it has not changed its view on the underlying principle, that the fee bears no relationship to the actual cost of approving the probate application, ‘has the appearance of a tax’ and is an ‘abuse of fee-levying power’.
Earlier this month the government said it was reintroducing the controversial policy of a sliding scale of probate fees but that the maximum amount payable would be reduced. Currently fees are set at a flat rate regardless of the size of the estate.
The highest fee, on estates valued at more than £2m, would be £6,000. Estates valued at £50,000 or below will not face any charge.
In a report published today, the committee says the Ministry of Justice should explain its basis for taking this course ‘rather more clearly’ so that its approach can be better understood.
Before last year’s general election, the government proposed a fee of £20,000 for estates valued at more than £2m.
But in today’s report, the committee says its concerns have not changed, despite the apparent climb down.
It states: ‘Although, in this new version, the scale of the individual fees has been reduced, the committee has not changed its view on the underlying principle, that is that the fee bears no relationship to the actual cost of approving the probate application and has the appearance of a tax.’
The committee adds: ‘In considering the policy the house may wish to bear in mind that those with higher value estates will already be contributing to the Exchequer through inheritance tax and stamp duty of up to 12% if a property is sold. It is also worth remembering that such estates are often divided between a number of beneficiaries, many of them charities.’