As the government confirms the new banded Probate fee charges, I explain the implications…
Implications of the changes
Despite overwhelming opposition, the government has confirmed that the fees for a probate application will change. This means instead of a fixed fee, it will move to a banded system, where fees increase with the value of the estate.
The fees will range from zero for estates worth less than £50,000, to a maximum of £20,000 for estates worth more than £2 million.
Concern about the changes
In response, the Society of Trust and Estate Practitioners (STEP) expressed concern at the proposals.
Now that the changes have been confirmed, STEP Chief Executive, George Hodgson, said: “STEP is very disappointed that the Ministry of Justice has decided to ignore the view of both STEP and the overwhelming majority of respondents to this consultation and press ahead with what represents a new tax on bereaved families.”
The Ministry of Justice commented: “Court fees are never popular, but they are necessary if we are as a nation to live within our means”.
These proposals would raise around an additional GBP250 million a year, which is a critical contribution to cutting the deficit and reducing the burden on the taxpayer of running the courts and tribunals.
Difficulties the changes may cause
It’s likely to create a real problem for cash-poor property owners, who will have to seek alternative funding to pay the fee, and potential problems with the repayment of any loan.
Banks have become notoriously reluctant to provide loans for Inheritance Tax payments, and may take the same view for loans for the new Probate fees.
There must also be concern for the elderly, who may feel pressured into giving away assets in their lifetime to avoid these high charges. Children don’t always act in the best interests of their parents, and the elderly might find themselves living in house owned by one or more of their children.
If you need any advice about probate or inheritance tax, our team can give you help and support. Please get in touch on 01908 660 966.
Image courtesy of 123rf.com