Increased Probate Fees

February 27, 2017

Wills and Probate

Increased Probate Fees

On 24 February 2017 the Ministry of Justice published the Government’s response to the consultation on their proposal to reform court fees for grants of Probate.

Despite extensive disagreement, the changes in the proposal originally published in February 2016 will be put to Parliament.

The consultation documents sought opinions on a new fee structure for applications, increasing the threshold below which no fee is payable, and removing probate applications from the fee remission scheme.

When asked whether it was fairer to charge a fee that is proportionate to the value of the estate, 695 out of 829 respondents disagreed. The 63 respondents who did agree (with 71 respondents not answering conclusively) cited that it was fair and that it would ease the disproportionate cost of a grant application of smaller estates. Some agreed with the notion in principle, but felt that the proposed fee was too high.

Those who disagreed felt that the fee should reflect the work that was done by the Probate Service and highlighted that the work done by the body is the same regardless of the size of the estate.

In response to the suggestion of increasing the value of estate threshold under which no fee is payable from £5,000 to £50,000, those who agreed said the threshold was currently too low and did not reflect estate valued. Some thought that the proposed increase was too high. Others cited that estates forced to pay the higher application fees would, essentially, be subsiding those estates under the threshold.

HMG has produced an information sheet which details the proposed fees for typical values of estate.  Please contact us for more information.

The big question related to the proposed increased fees. For estates over £2m, the new fees will be £20,000 and represent a whopping 129-fold increase.

Of the 831 responses that were received, 810 of respondents disagreed and 21 respondents agreed or had no conclusive answer. Those who agreed with the changes felt that the increases were justified. Some suggested that that more steps between bands should be added.

Those who disagreed said that the charges would be excessive and unjustified against the administrative cost for the Probate Service of issuing the grant. Note was made that it was unfair to take into account the value of the estate before inheritance tax had been deducted.

One major concern raised by the consultation was how exactly executors were supposed to fund the increased fees. In the Response, the Ministry of Justice reported that there had been discussions with the British Bankers’ Association and the Building Societies’ Association on facilitating access to cash and guidance is expected from both these bodies.

The Ministry of Justice have suggested several ways of financing the new charges, including:

  • Cashing in the deceased’s estate – of course, subject to the approval of the bodies holding funds (some of which will require a grant before funds are released); 
  • Executors paying the fees from their own funds, citing that they would only be “out of pocket temporarily” – this will depend on cash being available and the executors being able to be without it for some time;
  • Assistance from beneficiaries; and
  • Loan (depending on the executor’s credit rating) – problems with this were highlighted when considering the impact on low income or elderly executors and whether they would realistically be able to get a loan, as well as the very high interest rates that are typically seen with ‘probate loans’.

At the end of Chapter 2 of the Response, the Ministry of Justice notes that “ultimately no one is forced to be an executor – they would always be able to refuse”, omitting that fees would have to be paid by someone eventually – be it an executor or an administrator.

No doubt, much with the increased SDLT rate in March 2016, there will be a rush to make applications before the deadline once we know when the measures will be introduced. HMG LAW LLP will keep an eye on the proposal as it progresses so that clients know well in advance of the change.

If you are facing any difficulty with making an application for Probate, call Anna on 01865 255632 or email anna.casey-woodward@hmg-law.co.uk.

posted by Anna Casey-Woodward | February 27 2017