Reintroducing a proposed rise in probate fees, previously labelled the ‘death tax’, would be very damaging for both law firms and the public, solicitors have told the Gazette.
Speculation was mounting at press time that the reform, shelved in the run-up to the general election, could be revived by a hard-pressed chancellor of the exchequer in Wednesday’s budget statement.
Announced last year, the reform would have set fees according to the value of the estate. In some instances, fees would have risen to £20,000 – 129 times more than the current flat rate. Fees are presently set at £215, or £155 for those applying through a solicitor, regardless of the size of estate.
The money generated, expected to be around £250m per year, was to be used to fund the courts and tribunals service, currently undergoing a a £1bn ‘transformation’ over three years. Since shelving the reform, the Ministry of Justice has remained coy on future plans, saying only that its position will be ‘announced in due course’.
Karon Walton, partner at Tollers Solicitors and director of Solicitors for the Elderly, said she would not be surprised to see a reintroduction of the policy. ‘Had Theresa May not called an election the fees would likely be in place now,’ she said.
‘The public and solicitors feel very strongly about it. It’s essentially a tax through the back door on people who have money in property.’
She added: ‘There’s a suggestion that solicitors might have to foot the bill for an upfront fee. At the moment firms sometimes cover it because it’s a flat fee [which would then be claimed back through the estate]. I can’t see many solicitor firms saying they are going to cover fees that potentially stretch to thousands.’
Kerry Underwood, senior partner at Underwoods Solicitors, said most reports had suggested that smaller firms would be the hardest hit, but he warned that the proposals would also affect larger firms with ‘multiple clients and portfolios’.
‘It’s also potentially detrimental to traditional Conservative supporters because it depends on the size of the estate,’ he added, warning that the government might struggle to get proposals through parliament.
‘Making a profit to fund the criminal justice system is just like imposing a tax,’ he said.