Subject to parliamentary approval, the Ministry of Justice has announced proposals for Probate Court fees to substantially increase from this May, although the exact date is still to be confirmed.
The government plans to introduce a sliding scale of banded fees where the cost increases in line with the value of the estate, replacing its current flat fee system of £215 where a personal application for a grant of probate is made, or £155 for those applying via a solicitor.
The new banded system will be structured as follows:
- Estates worth under £50,000 will be exempt from any fee
- Estates worth between £50,000 and £300,000 will be charged £300
- Estates worth between £300,000 and £500,000 will be charged £1,000
- Estates worth between £500,000 and £1 million will be charged £4,000
- Estates worth between £1 million and £1.6 million will be charged £8,000
- Estates worth between £1.6 million and £2 million will be charged £12,000
- Estates worth more than £2 million will be charged £20,000
The government reports that it needs to look at ways to make sure that the courts and tribunal service is adequately funded now and in the future and so the increase in the fees is to raise more money to fund the service.
The Probate Court fee is applicable on all estates valued at £50,000 or more, even those where no inheritance tax is actually payable. The fee will be payable to the Probate Court up front.
The government claims that under their proposals, no estate will pay a fee that is more than 1% of its value and that 92% of estates will pay £1,000 or less, 98% will pay £4,000 or less and less than 2% of estates will pay £8,000 - £20,000.
This could be difficult for estates that are mainly made up of assets such as property and have very little in liquid assets such as bank accounts. Executors (or even beneficiaries) may find themselves having to either personally pay the court fee, and be reimbursed at a later date, or even take out a loan to pay the fee.