Resurrection of the Probate ‘Stealth Tax’Pepperells
As a personal representative of an estate, you will be required to apply for a Grant of Probate or a Grant of Letters of Administration/ Representation where the estate includes properties or investment products (including stocks and shares) that are to be sold or transferred.
In estates where there are insurance policies or bank accounts holding a value of over approximately £5,000 it is highly likely that the Grant will be required. Please bear in mind that the amount that a bank or building society will release without a Grant will differ between organisations.
As fees currently stand, if you wish to deal with the Grant without the assistance of a solicitor, the Probate Registry fee will be £215. However, if you instruct a solicitor to deal with the Grant on your behalf, the Probate Registry will be £155. These fees are a flat rate.
However, these fees could soon be subject to a significant increase following the resurrection of government proposals to introduce a sliding scale.
The sliding scale proposed by the government appears to be as follows:-
|Value of Estate||Fee payable|
|0 – £50,000||Nil|
|£50,001 – £300,000||£250|
|£300,001 – £500,000||£750|
|£500,001 – £1,000,000||£2,500|
|£1,000,001 – £1,600,000||£4,000|
|£1,600,000 – £2,000,000||£5,000|
|£2,000,001 or more||£6,000|
These fees were laid out to Parliament by Justice Minister Lucy Frazer, who claimed that the increase in fees would introduce a “new, banded structure of fees”. Although the government seem to have listened to the frustration of the legal profession by reducing the proposed fees of 2017, the new suggested sliding scale remains arguably unjustifiable.
A report by the Lords Legislation Scrutiny Committee states, “To charge a fee so far above the actual cost of the service arguably amounts to a “stealth tax” and, therefore, a misuse of the fee-levying power”.
The government aims to have the new legislation through Parliament by April 2019.
Ultimately, it is unlikely that a modern estate requiring a Grant will come in below the £50,000 threshold, particularly if there is a property. Therefore we strongly advise that if you have recently suffered the loss of a loved one and suspect that a Grant may be needed in order to administer the estate, please get in touch as we still have time to obtain a Grant before the price rises are introduced.