Update: Radical Changes to Probate Court Fees Dropped (21 April 2017)

Statement from Caroline Fletcher of Harris & Harris, a member of Solicitors for the Elderly:

We are delighted to hear the proposed probate fees have been dropped. It was very clear from the offset that the new system was nothing more than a backdoor tax and the Government had abused its powers in pushing them through under the guise of a fee.

To call the new system ‘proportionate’ was frankly ridiculous when you consider that some larger estates were set to see a 13,000% increase in fees.

What’s more, by proceeding with the changes, ministers point-blank ignored the views of almost every respondent involved in the consultation process.

Since then, SFE has campaigned hard, alongside other organisations, to have these changes reviewed. Our organisation is made up of over 1,500 lawyers across the country and not one member agreed with the fees.

In the meantime, we have seen a dramatic increase in enquiries from older and vulnerable people worried about the fees. Our fear was that some people may have been led to attempt to avoid the fees by decreasing the value of their estate, thereby leaving themselves with insufficient assets to provide for the rest of their life. With the current social care crisis facing the country, the unintended consequences of this change could have been disastrous. We are extremely relieved to hear this has now been avoided.


 

Original Article published on 2nd March 2017:

When someone dies, their Personal Representative (“PR”) has to deal with administering their estate. Where there is a Will this will be done by the Executor. Where there is no Will it will usually be a beneficiary, often a close family member, that takes on this task, in which case they are known as an “Administrator”.

In most cases it will be necessary to obtain a Grant of Representation (i.e. a Grant of Probate or a Grant of Letters of Administration) (“the Grant”). This is a Court Order which confirms the authority of the PR to administer the estate. A Grant is normally required in order to gain control of the estate assets.

The application to the Probate Registry to obtain the Grant incurs a court fee. At present the fee to obtain a grant of probate is £155 if a solicitor applies for the Grant or £215 if anyone else applies, but there is an exception for estates with a value under £5,000 which incur no fee. The Government has proposed to change the system so that the threshold at which a court fee becomes payable will increase from the current £5,000 to £50,000. However the fees for estates with a value over £50,000 will increase, with a sliding scale proposed depending upon the value of the estate, 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 £1 million and up to £1.6 million

£12,000 for estates worth more than £1.6 million and up to £2 million

£20,000 for estates worth more than £2 million

According to the Law Society Gazette the changes are part of a drive to reduce the cost of running courts and tribunals, and raise £250 million for the Exchequer.

Solicitors for the Elderly (SFE) and others in the legal profession have campaigned against the changes.

Claire Davis, Director, SFE said:
“SFE is extremely disappointed to see that the consensus to reject the proposed probate fees has been ignored.
“For the 62% of estates that use a solicitor, probate registry performs a purely administrative role, and the value of the estate has no bearing on the work undertaken.
“To burden larger estates with a significantly larger fee is an unfair form of taxation. For people in this situation, their property is often their primary asset, and they have little cash to pay for higher probate fees, on top of other necessities such as IHT or the use of a solicitor.
“The increase in probate fees will place a burden on families at a sensitive and distressing time and is likely to put people who are vulnerable and/or elderly at risk. Our fear is that such clients might be persuaded to take steps to avoid probate fees, even if the effect is to leave them with insufficient assets to provide for themselves for the rest of their life.”

The Society of Trust and Estate Practitioners (STEP) also opposed the changes. For more information and the reasons why, see the following article on the STEP website:

http://www.step.org/news/uk-government-confirms-probate-fees-increase-high-value-estates

Caroline Fletcher, Associate Solicitor at Harris & Harris is a member of SFE and Joshua Eva, Partner an associate member. Joshua Eva is also a full member of STEP and Caroline Fletcher a student member.

The new court fees are expected to come into force from May 2017.

If you are concerned about the changes please contact one our specialist solicitors who can advise you:

http://www.harris-harris.co.uk/who_we_are/