Eleanor summarises the government’s response to the recent consultation regarding increases to probate fees, and the increases that are due to take effect in May 2017.

I previously commented on the government’s proposals in relation to probate fees, and Hugh James’s response to the government consultation, here.

What kind of response did the government receive to the consultation?

The government received 853 responses to the consultation from law firms, the Senior Judiciary and members of the public.

810 of the respondents disagreed with the proposed fees, which are banded based on values of estates. Some of the reasons for disagreement were as follows:

  • the same amount of work is involved for the court service in issuing a grant of probate in a low value as in a high value estate;
  • the size of the fee should reflect the cost of providing the service;
  • the proposals do not reflect the cost of the service but will generate revenue. As such this is in effect an additional form of taxation, which is unfair, particularly as many estates incurring the increased fees will already have paid inheritance tax;
  • the fees proposed are excessive; and
  • difficulties may be faced by executors in obtaining finance to cover probate fees in cases where the estate is “asset-rich, cash-poor”.

What happens now?

Despite the dissent in the vast majority of responses to the consultation, the government is proceeding with the proposed increases to probate court fees, in line with the original proposals. The rationale behind this is that, to maintain access to justice now and in the future, it is necessary to ensure the court system is adequately funded. The Lord Chancellor considers it fair and necessary to increase the court fees payable by estates that can afford to contribute more.

What is the new probate court fee structure?

The new fee structure is as follows:

Value of estate (before inheritance tax) Proportion of all estates in England and Wales Proposed fee
Up to £50,000 or exempt from requiring a grant of probate 58% £0
Exceeds £50,000 but does not exceed £300,000 23% £300
Exceeds £300,000 but does not exceed £500,000 11% £1,000
Exceeds £500,000 but does not exceed £1million 6% £4,000
Exceeds £1million but does not exceed £1.6million 1% £8,000
Exceeds £1.6million but does not exceed £2million 0.3% £12,000
Above £2million 0.5%

£20,000

What does this mean for lower value estates?

Currently, probate court fees of £155 for professionals and £215 for individuals are payable in all estates valued over £5,000 which require a grant of probate. Many estates valued below £50,000 do not actually require a grant of probate, as banks and other asset holders are prepared to release funds to executors without a grant being obtained. However, for the estates valued under £50,000 that do require a grant of probate, the new fees structure will mean a saving of £155 or £215.

What does this mean for higher value estates?

The picture is obviously very different at the other end of the scale, with the more valuable estates facing substantially higher fees. Estates valued over £2million will see probate court fees jumping from £155 or £215 to £20,000.

Are there any concessions available if it is not possible for the executor to raise the probate court fee?

Whilst probate fees will be removed from the general fee remissions scheme for court fees, it will still be possible to apply to the Lord Chancellor for fee concessions in exceptional circumstances of undue hardship where all reasonable means of paying fees have been exhausted. Also, where there are no liquid funds available to pay the court fees, it will in limited circumstances be possible to apply to the probate registry for a limited grant of representation to enable executors to realise assets for the sole purpose of paying the fees.

When will the changes take effect?

It is expected that the changes will come into effect in May 2017, although this is subject to parliamentary approval.