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Most Probate Fees Set to Increase Substantially From May 2017

Most Probate Fees Set to Increase Substantially From May 2017

The Ministry of Justice has confirmed that, subject to parliamentary approval, most probate fees will increase substantially from May this year. The government is introducing a banded system where the fees increase based on the value of the state. This replaces the current flat fee of £215, or £155 if the application is made through a solicitor.

On the new scale, there will be no fee for estates worth less than £50,000. The scale for estates worth more than this is:

British Bankers Association (BBA) with a view to enabling funds, which can currently be accessed to pay inheritance tax, also being available to pay probate fees. It is understood that guidance will be published by the BBA and the Building Societies Association but there is no indication as to whether this will provide a guarantee that credit funds can be used for this purpose.

Where there are insufficient funds, the Government has suggested that funds could be raised by a personal loan by an executor. As an executor has no personal liability for the debts of the estate, an executor may be reluctant to entertain this especially if they are not also a beneficiary. The Government suggested that this would mean that the executor was only temporarily out of pocket, but if a house needs to be sold, this could be some considerable period of time. A loan may be a possibility but at the moment this suggestion is based on the executor seeking a personal loan rather than an executors loan. This will be dependent upon the credit rating of the executor and could be a time-consuming exercise. An executor who is not a beneficiary may not be inclined to take this risk. The Government also suggested that a professional executor such as a solicitor or trust corporation may be willing to pay the fee up front. This is unlikely to be popular!

The increase in the threshold to £50,000 (from £5,000) below which no fee is payable is welcome. However, the increase for all other estates seems unfair. When the Law Society Gazette reported on the proposals in February 2016, it said “It is unfair and discriminatory to expect the bereaved to fund/subsidise other parts of the court and tribunals service. Court fees are a necessary source of funding but should not be charged over and above the cost of the specific service.” Many will agree with this and view the government’s decision to ignore the views of the majority of respondents to its consultation, as a tax on estates.

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Contact IBB’s experienced wills, trusts and probate solicitors today to discuss your inheritance tax and estate planning issue. Call us today on 01494 790002 or email jacqueline.almond@ibblaw.co.uk. Alternatively please click here for more information on how we can help you. We are based in Chesham, Buckinghamshire but support clients in all surrounding areas.