8 February 2019 | Firm news | Article by Eleanor Evans TEP
The House of Commons Delegated Legislation Committee yesterday voted by nine to eight in approval of the proposed increases to probate fees.
Assuming the proposals are approved by the House of Commons (which is likely), the fee increases will take effect in April 2019 (the exact date is yet to be confirmed).
The fee increases are substantial, and the income will be used to benefit the court system as a whole, rather than just covering the cost of the Probate Registries. The government has been criticised for the way in which the changes have been introduced, as secondary legislation is not scrutinised in the same way as primary legislation. Critics of the plans, including STEP (the Society of Trusts and Estates Practitioners) have expressed views that the increased fees will effectively amount to an additional inheritance tax.
The fee increases will cause difficulties for executors of valuable estates where the value is mainly tied up in property. It may be necessary for expensive loans to be sought to fund the fees up-front. The changes are also likely to impact substantially on the charities sector. Estates with legacies to charities will be charged the increased fees of up to £6,000, where previously they only incurred flat fees of £155 or £215. As there is no charities exemption from the fee (as there is with inheritance tax), charities’ legacy income will be significantly impacted.
For more information about the probate fee increases and how they could affect you, please get in touch.