Louise Igoe is a partner in the Private Client department at law firm Lodders
Announcing the proposals, Justice Minister Lucy Frazer said the proposed fees system would ‘see thousands of bereaved families paying no probate fees at all’ but Louise Igoe, a partner in the Private Client department at law firm Lodders, says the reality of the planned sliding scale of fees is little more than a means of generating more tax:
“Probate fees are supposed to cover the cost of a service. Having a sliding scale based on the value of an estate indicates that this is in fact an extra tax.
“Extra income generated through the fees systems will go to the courts and tribunals to plug a shortfall in the cost of the courts service, a further sign that this is a tax and not simply a way to cover the cost of obtaining a grant of probate, as the Minister claimed in her announcement.”
It has been estimated that the new scheme will bring in an additional income of £145m a year from 2019/20, rising to £185m in 2022/23.
The Justice Minister explained that fees will be set at a level to ensure they will only be paid by those who can afford them, with all income going directly to the courts and tribunals.
“The probate system should not be used to generate a profit for the courts service, and these proposed changes to the fee structure and their payments smacks of exactly that,” adds Louise.
“This change will have a direct impact on the people who need to obtain a grant of probate as the cost will have to be paid up front at a time when the assets of the deceased are frozen, despite the government’s assurance that the fee can be recovered from the estate, so that executors will not end up personally out of pocket in the long run. However, it is in the short term where they will be hit hardest and then they will have to wait for the probate to be processed and finalised before they can hope to recover the costs.”
The proposed probate fees scale is calculated on the value of the estate before inheritance tax. Estates valued of up to £50,000 or exempt from requiring a grant of probate carry no fees, those valued between £50,000 and £300,000 will have fees of £250, fees for those valued at £300,000 to £500,000 will be £750, and for estates of £500,000 to £1m the fees will be £2000.
For estates over £1m, fees are £4000, £1.6m to £2m are £5000, and a fee of £6000 applies for estates valued at £2m and above.
Louise adds: “Possibly the only good point of the announcement is that the proposed fees are in fact lower than those suggested last year.”
For more information, visit: www.lodders.co.uk
