The Ministry of Justice proposes to increase the probate application fees so as to raise an extra £250m a year to fund the courts and tribunal service.
The proposals would lift 30,000 estates out of paying the probate fee altogether as it has increased the threshold value of estates exempt from paying any fees to £50,000, up from £5,000.
The current fees payable are £155 on all estates over the sum of £5,000.
However, the proposals also recommend that estates worth between £50,000 and £300,000 would pay a £300 fee and will see fees progressively rising from estates worth between £300,000 and £2m. Estates valued for probate at over £2m would be charged £20,000, a 12,803% increase over the current fee.
North West Cambridgeshire MP and justice minister Shailesh Vara commented: ‘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. They are also necessary, making a significant contribution to reducing the deficit and enabling investment, which will transform the courts and tribunals service.’
Vara insists that: ‘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 £250m a year, which is a critical contribution to cutting the deficit and reducing the burden on the taxpayer of running the courts and tribunals.’
Mike Cox, Senior Partner and Head of the Private Client team at Woodfines acknowledges the need to reduce the burden of costs on the tax payer, but states: ‘it is hard to see any justification for the proposed increased fees, which are far in excess of the actual costs incurred by the Courts and Tribunal Service and amounts to effectively an additional Inheritance Tax liability’.
Mike added that in many cases executors may find difficulties raising the money to pay the fees since accessing cash before the grant is issued can be both bureaucratic and expensive.
Jonathan Smithers, President of the Law Society, said: 'We support the Ministry of Justice’s aim of a simpler, more streamlined process for probate users. Many people would regard a progressive fee structure as a fairer way to charge for the service, but the fees proposed for high value estates do not bear any relation to the work or value involved. We will put forward our arguments in our written response to the consultation.'
Woodfines have been invited to comment on the proposed fee increase and will make known its opposition.