Latest on the probate fee increase
On the 28th November 2018, Junior Justice Minister, Lucy Frazer, announced that the draft Non-Contentious Probate (Fees) Order 2018, (the 2018 draft Order) had been laid before Parliament. This would increase the current fixed fee of £155 for a Grant of Probate with a banded fee, which would increase with the value of the estate. At its highest this would represent a probate fee increase of almost 4000%.
The new system was supposed to come into force in April, but the date came and went, and the fee remained the same.
So, what has happened? In short Brexit. Not that we have left the EU, (at least, not at the time of writing), but Brexit has, quite rightly, been keeping the House of Commons rather busy and so there has been no parliamentary time for the 2018 draft order to be debated and voted on.
Until the order passes through Parliament we remain on the same fee structure. It is of course still possible that the order will be voted down, so whilst we remain in limbo on when (and if) the new regime will come in, let’s look at what we do know about the new rules.
- The new fees will apply from 3 weeks after the date the order passes through the commons – meaning that once voted on, we have 3 weeks’ notice to finalise any probate applications and have them approved within the current fee structure
- The date that the probate application is received informs whether the new fee applies to an estate, not the date of death. Time is of the essence for probate applications because if the deadline is missed, the new and increased probate fees may apply
- Under the new system, the value of an estate will be the net estate passing under the grant. Assets owned as joint tenants or pension lump sums passing outside of the estate will not be included in the value for working out the appropriate fee. Other assets that will be ignored are foreign assets, gifts with a reservation and failed PETs
- Reliefs from IHT are not taken into account when working out the appropriate fee, so even if the estate passes free of IHT because of spouse, charity, business or agricultural relief, the probate fees will still be payable on the value of the estate
- Whilst the ONS and many in the media regard the increase as a tax, parliament supports, albeit narrowly, the government’s stance that it is a fee increase. What this means in practice is that the 2018 draft Order requires less scrutiny when passing through the House of Commons
Whilst all of these points are certain, there is no indication whatsoever of when, or indeed if, the draft Order will make it before the House of Commons. Probate fees, it turns out, are not as certain as death or taxes.
Ann-Marie Matthews is a solicitor in the private client team at Barker Gotelee, Solicitors in Suffolk.
Suffolk LPA Solicitors – for more information on our range of legal services, please call the team on 01473 611211 or email [email protected]
