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©2017 BY BLUECOAT WILLS & TRUSTS.

The new probate fees will affect everyone!!!

May 22, 2019

In November 2019 the government announced plans to restructure how probate fees will be charged. Probate fees will be charged on a sliding scale attached to the size of a person’s estate. The new charge will see some families pay over £6000 just for the government to grant probate.

 

What is a grant of probate?

 

Your personal representative or executor has to apply and be granted a Grant of Probate before distributing your estate.

 

Currently the government charges a standard application fee of £155 if made by a solicitor and £215 if the application is made by an individual. The government currently provides this service in a cost based approach. However, the new sliding scale will increase the level of money generated dramatically. The new service will cost some families a significant amount of money in addition to 40% IHT.

 

The new sliding scale:

Estates of below £50,000 = No fee

Estates between 50,001-£300,000 = £250 fee

Estates between £300,001 - £500,000 = £750 fee

Estates between £500,001- £1m = £2500 fee

Estates between £1m - £1.6m = £4000 fee

Estates between £1.6m – £2m = £5000 fee

Estates over £2m = £6000 fee

 

Most estates will have to pay between an extra £35 - £5785, of which otherwise would have been paid to your beneficiaries.

 

Probate fees apply to individual estates, so while a married couple can leave assets to each other free of IHT, probate fees will be charges on first and second death with a potential combined fee of up to £12,000.

 

 

Why has the government changed the fee?

The government is not changing the fees because there is a different level of service required for a larger estate but because they plan to support other justice services. “The Government said that the increased fees were necessary to ensure adequate funding for the court service, in order to provide access to justice in the long term”. In other words’ they have found another away of charging the public an additional fee for dying. Although not currently in place, an announcement of the charge in fees is expected soon.

 

 

What can be done to mitigate the fees?

Unfortunately, there is no way to mitigate paying the fees, the government has a complete monopoly on this service. So, what can be done? The simple answer is planning. A good estate planner can ensure that you do not slip over one of the thresholds, and if fees must be paid, ensure that your executors have the funds available to pay them. Speak to us today to see how you can mitigate this stealth tax.

 

Articles on this website are offered only for general informational and educational purposes. They are not offered as and do not constitute financial advice. You should not act or rely on any information contained in this website without first seeking advice from a professional. Past performance is not a guide to future performance and may not be repeated. Capital is at risk; investments and the income from them can fall as well as rise.

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