Last November the Ministry of Justice announced that it intends to re-introduce previous proposals (which were abruptly dropped when the 2017 general election was announced) to dramatically increase probate fees from April 2019.
At the time of writing, we do not know the exact implementation date. However, until then, anyone dealing with the administration of an estate, who has not yet obtained a Grant should consider taking urgent action to beat the increase. Once the increase has been announced, anyone who has not yet obtained a Grant will need to note the new fees as explained below.
What is the fee for and by how much will it rise?
When dealing with the administration of an estate, the personal representative may need to obtain a Grant. This is a document which proves the personal representative’s entitlement to deal with the deceased’s estate. Depending on whether the person died with or without a Will, the document might be called a “Grant or Probate” or a “Grant of Letters of Administration.”
To apply for a Grant, the personal representative applies to a Probate Registry which charges a fee for dealing with the application and “issuing” the Grant. The current fee is £215 if an application is made by the personal representative directly or £155 if made through a solicitor. (No fee if the estate is worth less than £5,000).
It is anticipated that from April the Probate Registry fee will change. Estates worth less than £50,000 will pay no fee. However, for all estates worth £50,000 or more the fee will increase significantly using a sliding scale, depending on the value of the estate. £250 for estates worth between £50,000 and £300,000 and rising to a maximum of £6,000 for estates worth more than £2million.
The probate fee must be paid upfront before the Grant is issued. However, the Grant is often required before significant assets (such as large sums of cash in bank accounts or sale proceeds from property) can be collected in by the personal representatives. This means personal representatives may have to call on family members of the deceased to pay the probate fee from their own funds, until cash can be made available in the estate.
The Ministry of Justice has defended the increase as necessary to contribute to the running of the courts and tribunal service. They estimate that 25,000 more estates each year will be exempt from fees. However, many commentators have referred to the increase as an additional death tax through the back door and Saga estimates that out of current fee-paying estates around one in five would be subject to a charge of £2,500.
If you have questions or need help with the administration of an estate, it is important to take specialist advice. At Neale Turk LLP our private client practice is led by myself, partner Charlotte Searle, a solicitor and fully qualified member of the Society for Trust and Estate Practitioners (STEP) and the Association of Contentious Trust and Estates Practitioners (ACTAPS). Our practice is recognised in the Legal 500, a national directory of leading law firms in the UK.