Yet another tax – Will the Probate ghost raise from its ashes

Many years ago, as most stories begin, an application for Probate (which is the legal authority to distribute someone’s estate after they die) was set at £215 when made by an individual. This charge needs to be paid before the inheritance is distributed. The fee was unchanged for many years.

Recently, as the funding for the courts became tight, some wise people believed that they can make up the deficit by increasing court fees. They thought very hard how they could generate £250m-£300m and came up with an amazing solution of a sliding scale Probate charge based on estate values.  In short, for estates valued at up to £50,000, there would be no charge (yeah, great!!!), but for estates worth over £2m the fee will be £20,000 (OMG!), a fee that you would need to pay ‘before’ you received any assets from the estate.  In between the two figures the fee will be calculated on a sliding scale based on the value of the estate.

“Wait just a second!”, was heard loud from the public, we don’t get it! Obtaining Probate is nothing to do with litigation (where a similar fee scale was applied).  Also, the work involved in processing Probate in most circumstances is not effected by the size of the estate.  It’s simply a registration service for which a fee is paid; but now, the charge is directly linked to the estate’s value. Why?

So, you might ask is this a genuine Probate fee for court services provided or a new hidden tax on estates on a descending scale? And how on earth will families across the UK be able to afford such a fee given it must be paid in advance!  What happens if you are asset rich and cash poor?

“It is a Probate fee or a tax on estates?” said the public.  Under the current legal system tax cannot be imposed without the consent of parliament! Oops!  The ball has moved back to the Ministry of Justice’s court.

The wise men, debated and brain stormed further and decided that the controversial changes to Probate fees will be abolished ahead of the 2017 election. The public was delighted and relieved, we can now rest in peace.

But, wait a second shouted a little boy, “Will the Probate ghost raise again?…

…. this remain to been seen.

The controversial new fees are:

Value of estate                         Proposed fee

Up to £50,000                          £0

Between £50K-£300K              £300

Between £300-£550K              £1,000

Between £500-£1m                 £4,000

Between £1.6m-£2m                £12,000

More than £2m                        £20,000

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