Changes to Probate Fees
April 2019 sees the introduction of the new sliding fee scale for probate fees in England and Wales. Prior to these changes, a fee of £215 was payable to obtain the authority to deal with the financial affairs of somebody who had died. If the estate (the deceased person’s assets) was worth less than £5,000 then no fee was payable and if a solicitor was appointed to deal with the estate the probate fee was slightly cheaper (£155).
Going forward, the new fees will be as follows:
|Value of Estate||Fee payable|
|Less than £50,000||0|
|£50,000 – £300,000||£250|
|£300,000 – £500,000||£750|
|£500,000 – £1m||£2,500|
|£1m – £1.6m||£4,000|
|£1.6m – £2m||£5,000|
The Government believes this is a fairer and more progressive way to pay for probate services. Their plan is to use the increased revenue, which some commentators believe could be as much as £185 million by 2022/23, to help fund the Ministry of Justice, in particular the court service.
Funding Probate Fees
Probate fees are payable before the estate can be administered so, now that they could be a significant sum, it is worth thinking about how you are going to fund these if you are an executor or are assisting in the administration of somebody’s estate.
The fees are paid by the estate so if there is cash in the bank account of the deceased person it is possible that the bank may allow this cash to be released to cover the probate fees. In estates where the assets are less liquid, such as property heavy estates, you may be able to obtain a loan but this could prove expensive depending on the terms. People with high value estates may want to consider the option of taking out a policy payable on death that would cover the cost of the probate fees or setting cash aside for this.
Is the new fee scale fair?
Many commentators argue that this is actually a tax and not a fee, as the service performed by the Probate Registry is the same regardless of the value of the estate so there should be no reason to charge different rates. However, labelling the cost as a fee has meant it has had a quicker path through parliament and into law than if it was labelled a tax. The new sliding scale does mean that about 25,000 estates worth less than £50,000 will be exempt from fees each year.
Regardless of the fairness of this system we should perhaps count ourselves lucky that the scale proposed by the Government in 2016 was scrapped; at that stage the top fee proposed was £20,000 for estates over £2 million and for estates in the £500,000 to £1 million bracket the fee was proposed to be £4,000!
We offer a wide range of services to help administer estates from acting as executors to advising executors. To find out how we can assist you please get in touch.
In addition, Bermans expert team can assist with the preparation of wills, lasting powers of attorney and estate planning.