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05/05/17Controversial changes to probate fees dropped ahead of the General Election

A controversial plan to change the structure of probate fees has been dropped ahead of the General Election on the 8th of June.

The proposed changes, that would have seen a sharp increase to the legal fees payable after death, are unable to be completed in time by the Ministry of Justice, leaving their future uncertain.

What were the changes?

Probate is a legal process where a will is proven and accepted as a valid document, and requires a fee to be paid to the Government before the executor of the estate can gather and distribute any assets to beneficiaries.

Currently, the fees are:

  • £155 if applying independently
  • £215 if applying through a solicitor
  • £0 if the estate is worth under £5,000

The proposed changes would have seen the flat rate system replaced by a sliding scale, with fees of:

  • £0 if the estate is worth under £50,000
  • £300 if the estate is worth under £300,000
  • A sliding scale from £1,000 to £12,000 if the estate is worth between £300,000 and £2 million
  • £20,000 if the estate is worth over £2 million

Whilst increasing the threshold for no fee to estates under £50,000 would benefit an estimated 25,000 families per year, the changes would also raise an additional £300 million per year for the Government. This has led to the Joint Committee on Statutory Instruments questioning its legality and labelling it a ‘stealth death tax’, as the way in which the charges are structured following the design of a tax rather than a flat fee.

The law states that new taxes should be approved by parliament before being voted on, whereas the change to probate fees was being altered via a statutory instrument, a form of legislation that allows an act to be made or altered without a vote by MPs.

Will the changes go ahead after the General Election?

The Ministry of Justice has announced that there was not enough time for the existing legislation to be altered, so the future of probate fees remains unknown. At the time of writing this, no formal announcements have been made by any of the main political parties regarding the changes, suggesting that it is not an immediate concern.

Tax and financial planning expert at Old Mutual Wealth, Gordon Andrews, commented:  “This is the second U-turn since the spring budget, following the chancellor’s swift U-turn on NICs (national insurance contributions). This leaves an even larger gap in the exchequer, which will now have to be filled.”