Probate fees to increase significantly in May 2017

The Government has announced its intention to proceed with plans to increase probate fees and has confirmed that from May 2017, the fees structure will change to a banded system.

This is despite an overwhelming rejection of the proposals by law firms, the Law Society and groups such as SFE* (Solicitors for the Elderly).  (The matter had been put out for consultation and, of the 829 responses, 695 had disagreed with the proposals.)

Claire Davis, Director, SFE, said:

SFE is extremely disappointed to see that the consensus to reject the proposed probate fees has been ignored.

For the 62% of estates that use a solicitor, probate registry performs a purely administrative role, and the value of the estate has no bearing on the work undertaken.

To burden larger estates with a significantly larger fee is an unfair form of taxation. For people in this situation, their property is often their primary asset, and they have little cash to pay for higher probate fees, on top of other necessities, such as IHT or the use of a solicitor.

The increase in probate fees will place a burden on families at a sensitive and distressing time and is likely to put people who are vulnerable and/or elderly at risk. Our fear is that such clients might be persuaded to take steps to avoid probate fees, even if the effect is to leave them with insufficient assets to provide for themselves for the rest of their life.

Under the present system, there is a flat-rate of £155 for solicitor applications (£215 for personal applications); this fee has only been in place since 2014, having increased from £45 at that time.

The new banded system will be based on the net value of the estate at the date of death.

The charges are separate to inheritance tax.

We understand that the new structure (net value of estate/proposed fee) will be as set out below:-

• Up to £50,000 or exempt from requiring a grant of probate > £0
• Exceeds £50,000 but does not exceed £300,000 > £300
• Exceeds £300,000 but does not exceed £500,000 > £1,000
• Exceeds £500,000 but does not exceed £1m > £4,000
• Exceeds £1m but does not exceed £1.6m > 8,000
• Exceeds £1.6m but does not exceed£2m > £12,000
• Above £2m > £20,000

For some estates, if you own a property, you will already be close to paying Inheritance Tax (subject to the new Residence Nil Rate Band), but now you will also have to pay a dramatically increased fee to obtain the Grant of Probate.  It is believed that most banks will have policies in place to allow the fee to be paid from the deceased’s frozen account(s).

If you have an estate to administer and have not yet applied for Probate, or are unsure if you need Probate, please ask to speak to a member of the Private Client Department.  In some cases, it may be possible for us to submit your application before the May deadline.  However, the deadline is fast approaching and an impossible one to beat for some estates.

We can also advise on estate planning, Inheritance Tax and the new Residence Nil Rate Band (which comes into effect in April 2017).

Catherine Cammock – Solicitor and Member of SFE

*SFE (Solicitors for the Elderly) is an independent, national organisation of lawyers, such as solicitors, barristers, and chartered legal executives who provide specialist legal advice for older and vulnerable people, their families and carers.