In a controversial move, the government will be changing their official probate fees from £215 to as much as £6,000 for some bereaved families.
At the moment, families who need a grant of representation to settle the estate of someone who has died pay £215 in government probate fees, or £155 if they have professional help. Estates worth less than £5,000 are exempt.
Under the new fee structure, families settling an estate worth more than £50,000 will pay between £250 and £6,000, depending on the size of the estate.
Opponents of the new probate fees have called them a “stealth tax” that will hit vulnerable bereaved families hard.
However, the government has said that due to the higher threshold for fee payment, an extra 25,000 families each year won’t pay anything at all. 80% of those who will need to pay will face fees of £750 or less, with a maximum of 0.5% taken from any estate.
“Fair and more progressive”
In a written announcement, Parliamentary Under-Secretary for the Ministry of Justice Lucy Frazer MP said: “This new banded fee model represents a fair and more progressive way to pay for probate services compared to the current flat fee and reflects our commitment to protecting access to justice by ensuring we have a properly funded and resourced courts system.”
She also claimed that there were “several options” for families to fund the new higher fees and those who struggle to pay may be able to apply to the Lord Chancellor to remit the cost under exceptional circumstances.
“£10 million” in charitable income lost
As well as families, the change in probate fees could also have a significant impact on charities, which often rely heavily on the ‘legacy’ money that people leave to them in wills. The Institute of Legacy Management estimates that the higher charges could cost charities as much as £10 million a year in lost income.
Matthew Lagden, chief executive of the ILM, said that “The government’s own impact assessment acknowledges that the current fees cover the average costs of making a grant of probate, so we are clear that this is a stealth tax, which will be borne in part by charities,”
“We are also very concerned that the government’s impact assessment dismisses the costs to the charity sector as ‘not expected to be substantial’, when the £10m lost to this tax would fund vital services across England and Wales.”
What are probate fees for?
When someone dies, the executor of their will (or if there’s no will, their next of kin) needs to sort out their legal and financial affairs. Their money, property, assets and belongings all need to be passed on to the right people.
To access things like bank accounts, change property deeds, or transfer shares belonging to the person who has died, a grant of representation may be needed. This is an official document that states that a person has the legal right to settle the estate.
To set the grant up, the HM Courts and Tribunals Service charges a probate fee – so called because the kind of grant of representation you get is called a grant of probate if there’s a will. It’s called a letter of administration if not.
On average, 51% of estates in England and Wales can only be settled with a grant of representation.
How are the fees changing?
The current probate fee is a flat rate of £215 charged to DIY applicants, or £155 for those using professional help. It’s the same for estates of all sizes.
The new probate fees will be based on how much the estate is worth in total:
- <£50,000: no fee
- £50,000 – £300,000: £250
- £300,000 – £500,000: £750
- £500,000 – £1 million: £2,500
- £1 million – £1.6 million: £4,000
- £1.6 million – £2 million: £5,000
- £2 million or more: £6,000
When will the higher probate fees come in?
The new fee structure will apply from April 2019 on.