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Home » Latest News » Probate changes ‘could cost families thousands’ warns legal expert

Probate changes ‘could cost families thousands’ warns legal expert

Probate changes ‘could cost families thousands’ warns legal expert

Unlawful ‘stealth tax’ could cost families thousands on top of existing inheritance taxes after the government announced plans to increase probate fees in May.

A probate is the legal authority to distribute a person’s estate after they die – and there is currently a flat fee for this of £215, or £155 if a solicitor applies, but the new rules could see this charge dramatically increase.

The Lord Chancellor Liz Trust plans to increase probate fees in May on an incremented scale that will see some people paying up to £20,000 just for the simple legal authority.

That’s an increase of as much as 9,300% in some cases. The changes are expected to generate an estimated £265 million a year to help the government reduce the burden on the taxpayer of running the courts and tribunals service, but lawyers are calling for fairness first.

While the incremented system could be seen as progressive in the sense that estates worth below £50,000 becoming exempt of charges, it is widely believed to be against the law for this change to be implemented by the Lord Chancellor alone.

There are of course already inheritance taxes that see estates worth more money paying more into the government’s coffers than lower value estates, so the question is: Why is the Lord Chancellor attempting to take still more from them?

By implementing these changes and labelling them ‘probate fees’ the Ministry of Justice (MOJ) are concealing the true nature of these charges behind a layer of bureaucracy. The work of the Probate Registry is almost the same regardless of the estate value, so people should not pay more for large estates which may also be liable for inheritance tax.

This huge hike up in probate fees can not be considered anything less than another tax, and that is at the heart of this debate. The crux is that tax law cannot be changed by any other body than the UK parliament, which is why there has been such a huge clamour to shut down this potentially unlawful move from the Lord Chancellor and the MOJ.

Solicitors for the Elderly an independent, national organisation of lawyers who provide specialist legal advice for older and vulnerable people have been campaigning against these changes in probate fees and we are delighted to see the Select Committee has confirmed what was clear from the offset – the Government’s probate fee hikes are nothing more than a backdoor tax, and the MOJ headed by Liz Truss has acted beyond its powers in enforcing these changes.

By proceeding with these fees, ministers point-blank ignored the views of almost every respondent involved in the consultation process. Since then, SFE has campaigned hard, alongside other organisations, to have these changes reviewed. Although it is unclear what this means for those currently applying for probate ahead of the deadline of 1st May, it seems likely there will be some sort of delay.

Our hope now is that the Government re-evaluates these fees, and at the very least, finds a fairer way of structuring them.

 

Jacqui Johnson | Specialist Probate Lawyer and head of the Private Client Department at Bridge McFarland Solicitors