On 24 February 2017, the Ministry of Justice published responses to its consultation on reforming the fees payable for Grants of Representation (“Probate”). Currently an application for Probate is either £155 if done via a solicitor or £215 for a personal application. If the value of the estate is below £5,000 then no fee is payable.
After the consultation last year, the Government has decided to proceed with its three key proposals:
1. The threshold below which no fee is payable will increase from £5,000 to £50,000
2. Other fees for an application for Probate will be based on a sliding scale dependant on the value of the estate (please see below)
3. Probate fees will be removed from the general fee remission scheme
The most important of these proposals is the change to the fees which will mean that for estates above £2Million, the fee payable to the court to obtain Probate will be £20,000.
New fee structure
Value of Estate (before Inheritance Tax) | Fee |
Up to £50,000 or exempt from requiring a grant of probate | £0 |
Exceeds £50,000 but does not exceed £300,000 | £300 |
Exceeds £300,000 but does not exceed £500,000 | £1,000 |
Exceeds £500,000 but does not exceed £1m | £4,000 |
Exceeds £1m but does not exceed £1.6m | £8,000 |
Exceeds £1.6m but does not exceed £2m | £12,000 |
Above £2m | £20,000 |
Although 695 respondents out of 829 disagreed with the question “Do you agree that it would be fairer to charge a fee that is proportionate to the value of the estate compared with charging a fixed fee” and 810 respondents out of 831 disagreed with the question “Do you agree with the Government’s proposals to charge fees for probate applications as set out in Table 1”, the Government has gone ahead with both of these proposals.
The Government’s view is that this will reduce the burden of the Court Service to the tax payer.
One of the main concerns that Executors will have with this new fee structure is the ability to pay. The Government suggests that Executors may be able to
- access cash in the deceased’s estate (The Ministry of Justice is asking the British Bankers’ Association and the Building Societies’ Association to produce guidance about releasing cash before Probate has been obtained);
- personal assets of the Executor (which would be reimbursed once Probate was obtained and funds available;
- a loan;
- assistance from beneficiaries of the estate, and;
- in exceptional circumstances, where Executors cannot access funds then the Probate Service will be able to provide limited access to Executors to the assets of the estate for the sole purpose of paying the fee.
The Government has said that their analysis of applications should mean that under the proposals, no estate will pay a fee that is more than 1% of its value and 92% of estates would pay £1,000.00 or less. Only 2% of estates would pay one of the higher tier fees of £8,000.00 or above.
No exact date has been provided for when these new fees will come into effect, but the Ministry of Justice confirmed that the Government is bringing forward the necessary laws for their plans in May 2017.
If you are an Executor of an estate and have not yet applied for Probate, you ought to consider if you can move things forward so that the necessary paperwork can be put in place before the fees go up, particularly if the estate is worth more than £50,000.
If you have any questions about these new proposals and how they might effect you, please contact one of our team here.