Flat rate probate fees switch to sliding scale

The government is to go ahead with plans to move from the current flat fee for applications for a grant of probate to a banded structure where the fees increase in line with the value of the estate, up to a maximum of £20,000, despite strong opposition to the proposals at the consultation stage

Currently, a £215 flat fee applies if probate is applied for by friends or family, which accounts for 40% of applications, or £155 if a solicitor completes the process.

The existing fees reflect average administration costs and currently generate around £45m per annum in income for HM Court and Tribunal Service (HMCTS).

From May, the rules will change to an approach based on the value of the estate before inheritance tax rather than charging a fixed fee, despite the fact that of the over 800 responses to a consultation, just 63 respondents agreed with this change and 695 were opposed to the idea.

Under the new structure the threshold below which no fee is payable for applications for grants of probate will be increased from £5,000 to £50,000. Ministry of Justice (MoJ) analysis suggests this will mean 58% of all estates in England and Wales will pay no fee.

For an estate which exceeds £50,000 but does not exceed £300,000, the fee will be £300. The MoJ calculates this will be the amount paid by 23% of all estates.

For the next band, up to £500,000, the fee is £1,000. For estates valued between £500,000 and £1m, the fee is £4,000.  That doubles to £8,000 for estates in the £1m to £1.6m bracket, rising to £12,000 for estates of £1.6m to £2m.  Estates valued at over £2m face a £20,000 fee.

The MoJ says no estate will pay a fee that is more than 1% of its value. It suggests 92% of estates would pay £1,000 or less, 98% would pay £4,000 or less and less than 2% of estates would pay £8,000 to £20,000.

In addition, under the new measures, probate fees will be removed from the general fee remissions scheme (‘help with fees’) but provision will remain for exceptional fee remissions to be granted at the discretion of the Lord Chancellor, in particular, where the executor shows that they have exhausted all reasonable means of funding the grant of probate application.

The Probate Service will also be able, via a limited grant of probate, to provide limited access for executors to the assets of the estate, for the sole purpose of paying the necessary fees.

As a result of the proposed changes, the MoJ estimates HMCTS will benefit from additional fee income of around £320m per annum.

Details of the consultation on fee proposals for grants of probate and the outcomes are here.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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