8 November 2018 | Comment | Article by Eleanor Evans TEP
The government announced this week some big changes to probate fees to come into effect in April 2019 – including a significant hike for estates valued at £500,000 or more.
Probate fees are the court fees payable when administering someone’s estate after their death. Currently, probate fees are set at the flat rate of £155 for applications made by solicitors and £215 for applications made by individuals.
The government previously issued a consultation on proposed increases in probate fees in 2016, but the proposed changes at that time were put on hold due to the general election.
The new changes will see fees rise to £250 for all estates valued from £50,000 to £300,000 and £750 for estates valued from £300,000 to £500,000. There is then a sharp increase to £2,500 for estates valued from £500,000 - £1 million, with increasing increments up to a maximum fee of £6,000 for estates over £2 million. Further detail provided in the below table.
Estates valued at less than £50,000 will no longer incur a probate fee.
|Value of estate (before inheritance tax)
|Up to £50,000 or exempt from requiring a grant of probate
|£50,000 - £300,000
|£300,000 - £500,000
|£500,000 - £1 million
|£1 million - £1.6 million
|£1.6 million - £2 million
|Above £2 million
What does Hugh James think about the rise in probate fees?
Eleanor Evans, partner and Head of Trusts and Estates Administration at Hugh James, said:
“Increasing the threshold for probate fees from £5,000 to £50,000 is a good idea, as this brings a significant proportion of estates out of the requirement to pay probate fees.
We do, however, have some concerns about the government’s proposed new fee scale – as it means a steep hike for most property owners.
A potential issue is that probate fees need to be paid upfront and if people do not have the means to do this or there are no funds available in the estate that can be released before grant of probate, they may have to turn to loans to cover these costs.
Also, charities, which are exempt from inheritance tax, will suffer a reduction in their legacy income due to large probate fees being payable in estates where they are left residuary legacies. This could be extremely detrimental for their work.
While we don’t disagree with a fee scale that is proportionate to the value of the estate, we do think more consideration needs to be given to ensure the fee structure is fair for all.”
If you wish to talk to one of our experts in more detail about probate fees and how this announcement may affect you, please get in contact.