Government set to hike cost of applying for probate

Following consultation, the government has announced plans to significantly increase probate application fees, despite a very small minority of respondents agreeing with the new proposals.

Only 7.6% of respondents agreed that the proposed banding structure is a fairer way of charging fees and even fewer (1.6%) agreed with the proposed rates. A number of the respondents stated that the fees were excessive and represented too great an increase.

Currently if a provider of probate services, such as Perrys, makes the application a flat rate fee of £155 applies (£215 for personal applications), regardless of the size of the estate. However from May 2017, this will be replaced by the sliding scale below:

For a large number of estates this will represent a significant additional cost and has been referred to by many as simply a new ‘stealth tax’.

The new fee levels together with the inheritance tax rate of 40% means individuals should consider estate planning at an early stage. In particular, individuals with an estate close to the next fee level should monitor asset values on a regular basis and consider what steps can be taken in order to reduce the size of their estate.

The application fee, together with the inheritance tax liability, must be settled before executors can obtain the grant of probate. Therefore this should also be considered with any planning exercise, particularly if the estate is asset rich but cash poor. 

If you would like to discuss how the new fee structure or inheritance tax generally, please contact your local Perrys branch.

Article written by Craig Harman