You are here

Probate fees to rise by more than £19,000 for HNWIs

Executors may struggle to pay new fee as they will not have access to funds until further down the probate process

23 February 2016

Add comment

The Ministry of Justice (MoJ) has launched a consultation on increasing probate fees in order to 'reduce the burden on the taxpayer of running our courts and tribunals'.

The probate application fee is currently triggered if an estate is worth more than £5,000 - the MoJ's proposals would abolish this fee for estates worth up to £50,000.

Estates worth £50,000-£300,000 would become subject to a new £300 fee - this fee will rise depending on how much the estate is worth up to a maximum fee of £20,000, chargeable to estates worth over £2m (see below for a full breakdown).

Justice minister, Shailesh Vara, has cited a £1.1bn gap in the MoJ's revenue that has to be filled by the government as the reason for the proposed change.

'The courts and tribunals service cost £1.8 billion in 2014/15, but only £700 million was received in income. This leaves a net cost to the taxpayer of around £1.1bn in one year alone,' he says in a letter to the chair of the Justice Select Committee, Robert Neill.

'These proposals are progressive, with lower value estates lifted out of paying any fee at all and other estates only paying more as the value of estate increases.'

Vara added: 'They are also necessary, making a significant contribution to reducing the deficit and enabling investment which will transform the courts and tribunals service.'

Joyce Bradbeer, a partner at Moore Blatch, has asked how the MoJ will be able to justify charging £20,000 for an estate worth over £2m, when it'll require roughly the same amount of work to handle an estate worth just over £50,000.

'Although moving the proposed fee structure from a flat to a banded fee is, in certain cases, deemed fairer and more progressive than the current structure, it also means that those with larger estates will be paying significantly more, even though the work that the probate registry has to do is virtually the same whatever the value of the estate.

"But, more to the point, how are the executors going to raise the money to pay for this?

'Access to cash is extremely limited prior to the issue of the grant of representation.'

Categorised in:

Wills, Trusts & Probate