“Probate court fees to rocket!” This was the heading of an article written by STEP, the world's leading organisation for private wealth professionals, in April 2014, with news of an increase in the cost of a probate application from £45 to £155 (or £215 for personal applications).
What then, will be the response to the Ministry of Justice’s latest consultation, published last week, on fee proposals for grants of probate, which moves from the flat fee, to a banded approach ranging from £0 for estates of £50,000 or less, to £20,000 for an estate worth £2 million or more?
This development threatens to change what is currently an administrative fee reflective of the use of court time into a tax in all but name. Unless the value of assets is below the threshold for probate, or assets are structured during lifetime so as to be held in such a way as to pass outside the estate, a grant will usually be needed before assets can be sold or transferred into beneficiaries’ names.
The bands currently suggested are:
Click here to view table.
Clearly this is a tax which will particularly impact high value estates. The consultation gives no consideration to reliefs, staged payments or exemptions (as may be available for payment of inheritance tax). The money raised is apparently to be used to 'redesign the system so that it is focused on making the experience of the bereaved as simple and hassle-free as possible'. It may take some convincing to reassure members of the public and solicitors alike that a hefty tax bill before even being able to access funds in an estate will have that stated effect.
The deadline for responding to the consultation which can be found on this page, and is open to members of the public, is 11.45pm on 1 April 2016.