From May of this year, the fee for rubber-stamping an inheritance is set to increase by over 9,000% in England and Wales for some estates.
Probate fees, which are the fees paid to the Courts for overseeing the discharge of a deceased’s estate, will increase to £20,000 in some cases. The current probate fee is set at a flat rate of £215, or £155 if you use a solicitor.
The main reason behind the increase is to generate additional funding for the Government’s Courts and Tribunal Service.
There is widespread disapproval of the increased fees, particularly because the size of an estate is not determinative of the amount of work that the Court has to do to grant probate. This is, in fact, a process which requires limited work by the Court, which usually includes examining the deceased’s will (if they have made one) and death certificate.
Most critics see this as a further “stealth tax on the dead” which penalises the wealthy. However, surges in house prices in recent years means that even modestly wealthy home owners, especially in London and the South-East, are likely to see their estates liable to pay the higher probate fees.
The increased fees could promote a greater awareness about the importance of careful estate planning. This might encourage people to think about reducing the size of their estate in time for their death, possibly by making life time gifts which may become exempt.
The increased fees may also lead to more sophisticated estate planning with people making complicated wills and setting up complex trusts. This may ultimately lead to more disputes and litigation, particularly from disappointed beneficiaries.
For further information and advice on all aspects of estate planning or general concerns about inheritance, please do not hesitate to contact Hardeep Nijher or Matt Smith on +44 (0)20 7354 3000.