Probate fee changes

Probate fee changes: a new “death” tax?

In March 2017 we reported that the Government was proposing to raise probate fees significantly (see our article here https://www.doddaccountants.co.uk/news/taxing-times-march-2017/).  In fact, “significant” is too understated a word for it – the rise in fees will be a 3,770% increase for some estates!

A new probate fee structure that means estates worth £2m or more will pay £6,000 in probate fees, up from a set fee of £215 – £155 if a solicitor is employed – currently payable, has been labelled a “stealth death tax”. The increase is a reduction on the original plans, which would have seen a bill of £20,000 for the largest estates. Estates with a value of between £1m and £1.6m will have to pay £4,000.

The changes were brought in via a “negative statutory instrument” which enabled the Government to write the changes into law without debate.

The Government said the changes were necessary to fund the courts system and were a “fair and more progressive” way of paying. It estimated the move would raise £185m a year by 2022/23. Many, including the Law Society, have called this unfair and unjustified and it can be seen as a new tax on top of the existing Inheritance Tax.  The Law Society and others fear the changes could force families to use unregulated planning services for IHT in an effort to shield their assets from HMRC.

The fee may cause cash flow problems for some estates which are property rich but cash poor, and – as with stamp duty land tax – there is an inherent flaw in the system that the people who have to pay may not have benefited in cash terms from soaring property values.

Please click here to go back to other Taxing Times stories…

<Jan 2019>
MTWTFSS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31

Jan 23

No events today
We are a relatively new, and potentially high growth, start up business. Alison Johnston has provided help over the last 6 months regarding access to funding, financial recording and general support without being intrusive. She has been a good sounding board which was much needed in the early days of the business. Without the support and knowledge base provided by Alison we would in no way have been able to source private angel funding to build a technology business in one of the most rural parts of the country. Her attitude, acumen and all round manner make her an asset to any business seeking help, advice and guidance in this tough climate. I strongly recommend any business using the services that she provides and have recommended her to my network of associates on a number of occasions.
-- Lyall Timmons, Timovate