A chance to hear the latest on employment, property, corporate and restructuring and insolvency and to ask questions and share your opinions.
DATE: Thursday 7 May 2020, 10:00am - 11:00am- delivered via Zoom Video Conference
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The government has brought back its 2017 plan for a significant increase in probate application fees for estates in England and Wales.
It is understood that the current plan to introduce the new probate registry fees will be in April 2019.
The proposed new fees are based on a sliding scale, set to replace the current fee for applying for probate of £215 when the application is made by an individual, or £155 when the application is made by a Solicitor.
However, estates worth up to £50,000 will be exempt from paying a fee, replacing the current threshold of £5,000.
Value of Estate before Inheritance Tax | New Fee |
Up to £50,000 | £0 |
£50,000 to £300,000 | £250 |
£300,000 to £500,000 | £750 |
£500,000 to £1 Million | £2,500 |
£1 Million to £1.6 Million | £4,000 |
£1.6 Million to £2 Million | £5,000 |
Above £2 Million | £6,000 |
The government has estimated the change will take 25,000 estates out of the fee system each year and will also raise £145 million in 2019-20 and £185 million in 2023 to pay for courts and tribunals system reforms.
Executors will be given several options to fund the new fees from the estate and a guidance document, Guidance on Ways to Pay for Probate Fees, will be published before the new rules come into force.
However, it is difficult to see how the new charges bear in relation to the actual cost to the probate registry of providing the service. On top of the disproportionate increase, this change will leave many estates struggling to pay the fee up front when assets are tied up in frozen bank accounts or real property. Banks will need to allow access to accounts to pay this. In the short term, therefore, executors will have little choice but to fund these extra fees personally, whether by loan (depending on the executor’s credit rating), or from their personal non-estate assets.
How estates will pay for this will ultimately remain unclear until the government publishes its promised guidance.
George Hodgson, CEO of STEP, said of the new charges that they ‘bear no relation to the cost of probate, and are simply another form of taxation, sneaked in through the back door.’
There are concerns that the new fee scale could tempt people to try and pass their estates on without applying for probate using other means during their lifetimes. This could be effective in some cases, but there is a risk that this could also lead to inequality between children and a misunderstanding as to who gets what and therefore not fulfilling the deceased's wishes.
Please contact our Private Client Department for advice on drafting your Wills, applying for Probate or you would like to discuss Estate Planning.
A chance to hear the latest on employment, property, corporate and restructuring and insolvency and to ask questions and share your opinions.
DATE: Thursday 7 May 2020, 10:00am - 11:00am- delivered via Zoom Video Conference
Cheltenham based solicitors, Hughes Paddison, have announced two promotions within their Senior Management Team. Jon Rathbone has been made an Equity Director within the firm, whilst Julie Bennett has been made a Director.
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