You may or may not be aware of the proposed increase in probate court fees.
Despite the Government ‘fixing’ the cost of probate applications as recently as 2015, a decision has been made to change the fee structure again. The consultation process has now concluded and it was agreed that the proposed fee increase will now take effect in May 2017. No specific day within the month has been agreed yet but we should all assume it is from the first of May to avoid any nasty surprises.
The purpose of the fee increase is to raise funds of approximately £300m which will be invested directly into Her Majesty’s Courts and Tribunals Service (HMCTS) to streamline its efficiency, and ultimately, deliver a better service to the public and professionals.
Currently, probate court fees are as follows:
• £155 (application through a solicitor); or
• £215 (personal application)
In comparison, the proposed new fees are eye-watering:
• £0 (estates worth £0 to £50,000)
• £300 (estates worth £50,001 to £300,000)
• £1,000 (estates worth £300,001 to £500,000)
• £4,000 (estates worth £500,001 to £1,000,000)
• £8,000 (estates worth £1,000,001 to £1,600,000)
• £12,000 (estates worth £1,600,001 to £2,000,000)
• £20,000 (estates worth more than £2,000,001)
These fees mean smaller estates worth up to £50,000 will have no fee, although estates such as this are unlikely to require a Grant.
Unsurprisingly, concerns have also been voiced from many quarters from those who recognise it will be difficult for executors to raise enough capital up front to pay the new probate fees as the new fees appear to work on the assumption that executors of estates worth over £2million will have £20,000 in their own back pockets.
Fortunately, this issue appears to have been resolved in the consultation process with banks and building societies who are willing to release funds to pay the new probate fees, much as they do for funeral expenses or the payment of inheritance tax at the moment.
However, the fee increase may still cause problems for some estates which are very high in value but have all of the wealth contained in non-cash assets such as shares or property.
Moving forward, the key date in a probate application will be the date of the application rather than the date of death which adds some pressure on the executors to act fast. However, a probate application can now be submitted without the need for a receipted IHT 421 form, which many will agree, is an excellent decision and will alleviate the application process somewhat.
There are only a couple of months remaining before the changes take effect therefore, if you are aware of any new estates/intestacies, either on a personal or professional basis, it is important to consider taking prompt action to avoid paying a high court fee.
This is something that BPE’s Private Client team is more than happy to assist you and your family/friends with, if help is needed. If you need any further information, please speak to one of the team.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.