Experts Discuss Whether The Probate Fees Bill Will Become Law
The Government has remained steadfast and resilient since the announcement of the new probate fees changes was made last November 2018.
The probate fees were due to come into force on 1st April, however, it seems that the fees order has missed this date but could still become law at some time in April.
Professionals in the sector are now being left with uncertainty, without no indication of when exactly the proposed new probate fees changes will come into force.
Furthermore, in the Office for Budget Responsibility’s latest Economic and Fiscal Outlook Report published this month, The Treasury is expecting the Office of National Statistics to categorise probate fees as a ‘tax’.
However, Lucy Frazer, the minister responsible for legal fees told parliament last month “What we are proposing is an enhanced fee, not a tax.” This appears to contradict what it says in the report.
As there is conflicting information, we asked industry experts whether they think the probate fees will be coming into force in April and their opinion of the fees being classed as a ‘tax’.
Ruth Pyatt, Director at Solicitors for the Elderly (SFE) said:
“Following years of opposition from SFE, an inflated rise to probate fees is becoming a reality, and possibly as soon as April.
“It’s deeply concerning that the probate hike has been disguised as a fee to avoid a parliamentary debate or vote. In contrary to previous announcements from the Ministry of Justice, a recent report from the Office for Budget Responsibility mentioned that the Treasury believes the Office of National Statistics will classify the cost as a tax on capital, rather than a payment for a service.
“The increased fees bear no relation to the administration costs of granting probate and it remains unclear how beneficiaries are expected to pay. This puts vulnerable people at risk, particularly when there is no immediate access to funds in the estate. SFE is also concerned that grieving families will be under enormous pressure as they race to process their applications in time. In the coming weeks, this will create further distress at an already difficult time.”
“The hike is expected to raise around £155 million a year for the Government and has slipped through any necessary parliamentary scrutiny.”
Ian Bond, Chair of The Law Society’s ‘Wills and Equity Committee’ and Director and Head of Trusts and Estates at Talbots Law said:
“Ministry of Justice confirms controversial reform of probate fees will NOT come into force on 1st April as previously thought. The Statutory Instrument that contains the new fees will not be laid before then due to pressures on Parliamentary time. Even if it was laid and approved the reforms would have taken 21 days to come into force, that takes us to the middle of April at the earliest.
“Many professionals have been in receipt of communications on 27th March from various Probate Registries that said “The Fees Order is subject to an approval motion in the House of Commons, after which the Order will be made. The new fees will come into force 21 days after the Order is made. The approval motion has not yet been scheduled. This means that the new probate fees regime will not be introduced on 1 April.”
“This is confirmed in a news release on gov.uk website (www.gov.uk/government/news/proposed-change-to-probate-fees) which addresses the issue of the delay in implementing the new fees and also the fact that only complete applications will be acceptable for the old fees to apply. This puts pressure on HMRC to turn around inheritance tax forms quickly to allow complete applications to be made to HMCTS before the fee changes.”
Clive Ponder, Founding owner of Countrywide Tax & Trust Corporation Ltd said:
The fact that the fees are going up is one thing, the other issue is the uncertainty around when this is going to actually happen and the issues this is causing professionals in organising their workload and informing clients! It would be nice to have some clarity about when the fees will come in and when they will be effective from – date of death, or date of application for example.
The uncertainty is the real issue at the moment!