Probate fees set to soar

22nd December 2016

The Government has announced plans to replace the flat fee cost for a grant of representation to a tier system that could see millions of bereaved families pay up to £20,000.

The current fixed fee system, which if applying through a solicitor is £155.00, remains the same whether an estate is worth £50,000 or £50 million ­– the administrative work involved for the probate office for a larger estate is no different from that of one costing significantly less. This therefore, raises the question as to why this tiered system is being introduced.  Shouldn’t the fees remain the same for all estates considering the cost of the administrative work seems to be equal?

According to Shailesh Vara, Secretary of State for Justice, the new fees would help cut deficit and lessen the burden of courts and tribunals costs on the tax payer. The proposal, if agreed, would raise £250 million a year for Her Majesty’s Courts and Tribunal Services, in addition to the £46 million generated currently per year from probate fees.  Vara explains that raising the threshold on estates worth £5,000 and more, to £50,000 would eliminate fees altogether for up 30,000 estates a year, which would lift the percentage of those who pay no fees to 57%. While that may be beneficial for many in the UK, it can be argued this is essentially an additional administrative cost on London, where the average cost of property hit just below £500,000 this year. The plan would subject an average grieving family in London with the burden of paying a fee of £4,000 and above in probate fees. Furthermore, in order to be in a position to apply for a grant, probate fees would need to be discharged beforehand. Consequently, raising funds could be a problem for the executors in circumstances where an estate has no liquid assets.

The Institute of Chartered Accountants in England and Wales have called the proposal inappropriate, representing “a pure revenue raising exercise, unrelated to the costs of the services provided” and “being levied on the basis of the value of estates rather than their complexity or other factors which might influence the costs borne by the Probate Office”.

President of the Law Society, Jonathan Smithers said: “We support the Ministry of Justice’s aim of a simpler, more streamlined process for probate users. Many people would regard a progressive fee structure as a fairer way to charge for the service, but the fees proposed for high value estates do not bear any relation to the work or value involved. We will put forward our arguments in our written response to the consultation.”

The proposed increase can be seen to be unfair, which levies additional charges on families already burdened with huge inheritance tax bills.  The consultation phase was completed in April however we are still yet to hear anything more on these proposes being implemented.

Personal Representatives who are yet to start the administration process of applying for a grant may well be advised to act sooner rather than later to avoid the possibility of the increase fees hitting them.

The proposed probate application fees are as follows:

  • £300.00 for estates worth more than £50,000 and up to £300,000
  • £1,000 for estates worth more than £300,000 and up to £500,000
  • £4,000 for estates worth more than £500,000 and up to £1 million
  • £8,000 for estates worth more than £1m and up to £1.6 million
  • £12,000 for estates worth more than £1.6m and up to £2 million
  • £20,000 for estates worth more than £2 million