A controversial plan to increase the Probate Court fee to up to £20,000 has been approved and will come into effect from May this year. This was proposed as a way of making the Probate Courts self funding, however has led to a massive increase in the costs of applying for Probate (or Letters of Administration – which is effectively the equivalent of Probate when there is no Will) and at some levels the new rates are effectively a ‘stealth tax’ on estates.
The current rate is £155 for a Solicitors application and £215 for an individual application. If the estate is less than £5000 no fee is payable.
The new structure is as follows:
- £300 for estates worth more than £50,000 and up to £300,000
- £1,000 for estates worth more than £300,000 and up to £500,000
- £4,000 for estates worth more than £500,000 and up to £1 million
- £8,000 for estates worth more than £1m and up to £1.6 million
- £12,000 for estates worth more than £1.6m and up to £2 million
- £20,000 for estates worth more than £2 million
A key level for our clients is the £300,000 to £500,000 ‘bracket’. Due to house prices in the Barnsley area a lot of the estates we are called upon to assist with are technically in this banding. The Court fee for an estate of this size will therefore be increasing by £845 in the Court fee alone. At the highest end of the revised Court fees an estate worth more than £2m is paying more than 129 times the current amount in Court fees!
Rianne Wilcockson, Private Client Solicitor at MKB Solicitors LLP, says “It is an outrageous increase in the level of fees that clients will have to pay. Although most would approve a tiered structure based on the level of the estate, the amount of increase is going to cause clients a great deal of difficulty. Most funds in an estate cannot be accessed until after the Grant of Probate has been obtained and therefore it is still unclear how clients will have to fund the Court fee.”
Despite strong opposition from Solicitors about the impact this could have, the changes have been approved and will come into effect this May. If there is a silver lining to the drastic changes, it is that an estate worth less than £50,000 will no longer incur a probate fee. However it is worth noting that simply owning a property will usually take a person over this threshold regardless.
Our advice therefore to clients who are currently administering an estate as an Executor, is to consider obtaining the Probate as quickly as possible in order to avoid the hike. In terms of estate planning in your lifetime, other options can be considered to prevent the estate being so high and would therefore advise clients to meet with one of our Probate Solicitors to discuss the matter in greater detail.