Probate fees could rise 920% for richest estates
Probate fees are set to be reformed with the wealthiest estates seeing the maximum they could pay rise 920%, up to £20,000.
Currently all estates worth more than £5,000 pay a flat rate of £215, however Parliamentary Under-Secretary for Justice Shailesh Vara MP believes the new proposals are far more progressive.
Aside from being more progressive, Shailesh Vara believes the proposals will gain the state £250 million each year. He also states that the fee would never exceed 1% of the value of the estate.
Under the new proposals, the current threshold of £5,000 will be raised to £50,000. The fees paid will be banded depending on the value of the estate as follows:
- £300 for estates worth more than £50,000 and up to £300,000.
- £1,000 for estates worth more than £300,000 and up to £500,000.
- £4,000 for estates worth more than £500,000 and up to £1 million.
- £8,000 for estates worth more than £1 million and up to £1.6 million.
- £12,000 for estates worth more than £1.6 million and up to £2 million.
- £20,000 for estates worth more than £2 million
In a letter to Robert Neill, Chair of the Justice Select Committee, the Under-Secretary wrote: “The courts and tribunals service cost £1.8 billion in 2014/15, but only £700 million was received in income. This leaves a net cost to the taxpayer of around £1.1 billion in one year alone.
“Our consultation on probate applications sets out reforms designed to increase income for a more sustainable courts and tribunals service and to introduce a more progressive fees regime. Probate applications are currently charged a fee of £155 if made by a solicitor and £215 if paid by an individual (“personal applications”). These fees apply to estates worth £5,000 or more. We propose raising this threshold from £5,000 to £50,000, lifting 30,000 estates out of the need to pay a probate fee altogether.
“The proportion of estates paying no fee would rise to 57%. Above that threshold, we propose that the probate fee increases in line with the value of the estate. Estates worth over £50,000 but below £300,000 would see their fee rise to £300, a modest increase of £85 on the current maximum fee of £215. 84% of estates would pay £300 or nothing and 94% of estates would pay £1000 or less. The maximum fee of £20,000 would only be paid by the very wealthiest estates, worth more than £2 million. The fee would never exceed 1% of the value of the estate and in many cases it would be considerably less.
“We also want to see a simpler, more streamlined process for probate applications, moving from a paper-based to an online system. This will make the Probate Service much easier to navigate so the experience of the bereaved is as simple and hassle-free as possible, reducing worry for executors at what is often a very difficult and distressing time, and enabling most applications to be completed online and, we hope, without expensive professional advice.”