As you may well know, the probate fee structure is due to change significantly.
The fee that is payable is to obtain a Grant of Probate. This is a legal document, which grants the executors the right to act under a Will or to act as administrators to an estate under the intestacy rules. The Grant is generally requested by financial institutions with whom the deceased would have held assets with such as property, bank accounts, investments and shareholdings. The fee is payable to the Probate Registry, which is a subdivision of the High Court, to process an application for a Grant.
At present, the probate fee is fixed; being £215 for individual applicants, or £155 for solicitor applicants.
The fee structure came under review in 2017 and was due to be reformed. This was subsequently dropped following the General Election.
The new probate fee structure, which was due to be implemented in April 2019 has still not been scheduled for debate or approval in the House of Commons. The earliest the fees will be brought in is 21 days after the motion is approved. The fee payable is dependent on the size of the estate, before considering any Inheritance tax due, using the following six band structure.
The idea of calculating fees on a banded system has been subject to much criticism, given that the Probate Registry will be carrying out the same work, irrespective of the estates value or complexity, with many branding the increases as a stealth tax.The fees are payable, in addition to any inheritance tax, from the estate at the time of the application and so executors/administrators will need to have the necessary cash flow in order to make the application. The Ministry of Justice is yet to issue guidance on how the new structure will work in practice.
The Ministry of Justice has declared that the new fees represent a “fair and more progressive way to pay for probate services…” and that the decision was taken after having listened and ensured that the new fees “are capped at no more than 0.5% of the value of the estate…”
The Ministry of Justice has stated that the circa £145 million they expect to receive in light of the increase will be essential to fund the courts and tribunal service. However, the increase also comes at a time when the Ministry of Justice is closing down regional probate registries to move the service under one roof.
Whilst the fees appear to be attractive to estates under the £50,000 threshold, the Ministry of Justice have stated that this accounts for only around 25,000 estates annually.
The threatened increase in costs has seen an immense backlog in work for both HM Revenue and Customs and the Probate Registry, with individuals and solicitors racing to obtain the Grant before the increase hits. This, coupled with problems with new software at the Probate Registries, sees many solicitors reporting delays of over 8 weeks in obtaining a Grant.