The Beatles, Taxman and the Cost of Probate

The Beatles, Taxman and the Cost of Probate

Recent news has confirmed the U.K. Government will bring changes to the cost of applying for Probate from April 2019. Whilst the Government has expressed a desire to lessen the burden on those less able to afford the cost of Probate, it also acknowledges the requirement to increase funding for the Ministry of Justice to provide the courts service.

So how does the change breakdown and how does it compare to current rules?

Currently the cost of securing probate – that is the legal command of a deceased person’s estate – is £215 ( or £155 if applying through a solicitor). This is the fee regardless of the size, nature or complexity of the estate. However, under the new regulations probate charges will be linked to the value of the deceased person’s estate.

The new probate charge will range from £250 to £6000 depending on the estimated wealth of the deceased. A small silver lining is that estates under £50,000 will be exempt – whereas currently the exemption threshold is £5,000. The Ministry of Justice has insisted that fees will never exceed 0.5% of the value of the estate and that more than an extra 25,000 families will no longer have to pay the probate cost*.

However some see the new brackets as a stealth tax on death. Seems The Beatles knew what they were saying when they sang “Now my Advice for those who die (taxman), declare the pennies on your eyes (taxman)”

Many are challenging what the extra band costs are actually paying for, as the level of work required to approve Probate essentially is the same. Additionally there is confusion over how the charge is made. Executors are expected to pay this cost up front before reclaiming it from the estate once Probate is granted. This has lead to concerns over bereaved families trying to find the funds to apply for Probate, perhaps even resorting to loans or credit cards to cover fees.

The charge breaks down as follows according to size of the estate:

· Up to £50,000 : no charge

· £50,000 to £300,000 : £250 Probate fee

· £300,000 to £500,000 : £750 Probate fee

· £500,000 to £1m : £2,500 Probate fee

· £1m to £1.6m : £4,000 Probate fee

· £1.6m to £2m : £5,000 Probate fee

· Above £2m : £6,000 Probate fee

With this in mind, perhaps now is the time to consider estate planning. Making sure you have properly utilised Residential Nil Rate Band and discussed all the measures available to secure your family’s inheritance is a valuable way to protect your family at an emotional time.

For a professional estate planning service with a personal touch contact Langhams Wills Ltd on 01473 487611 or email theteam@simplewillsonline.co.uk

https://www.gov.uk/government/speeches/announcement-on-probate-fees