Proposed Probate Fees Hike

The government has announced proposals to dramatically increase the costs of applying for a Grant of Representation ("Probate"). Without Probate your estate is "frozen" and, subject to limited exceptions, applying for Probate is obligatory if your personal representatives ("PRs") are to collect in your assets and distribute to your beneficiaries.

Currently, the maximum fee payable to obtain Probate is £215. Under the new proposals, couples could be looking at total fees of £40,000 with bereaved spouses/civil partners having to find £20,000 before they can access their deceased spouse's/civil partner's assets.

The proposed new fees are:

Value of Estate (before the deduction of Inheritance Tax)

Proposed New Fees

Up to £30,000 (or not requiring a Probate)

£0

Exceeds £50,000 but not exceeding £300,000

£300

Exceeds £300,000 but not exceeding £500,000

£1,000

Exceeds £500,000 but not exceeding £1 million

£4,000

Exceeds £1 million but not exceeding £1.6 million

£8,000

Exceeds £1.6 million but not exceeding £2 million

£12,000

Exceeds £2 million

£20,000

The Probate Registry is already self-funding and the government has attempted to justify these increases on the basis that the extra income will be used to invest in improvements in the Probate Registry and contribute to other areas of the court system which are not self-funding and are in deficit. Interestingly, the maximum court fee imposed in these other parts of the court system, where claimants do have a choice whether they take court action, is £10,000.

Subject to any reliefs and exemptions available, the value of your estate will already suffer a charge to inheritance tax at 40% on the value over and above £325,000 (the current nil rate band). In a worst case scenario, if your estate is valued at £2,000,001, your PRs will need to find £670,000 in inheritance tax plus...