For Executors needing a probate valuation by a Chartered Surveyor, we highly recommend that they hurry to obtain their valuation quickly and without delay, before the Government’s massive uplift in probate fees takes effect from May.
The Ministry of Justice has decided to go ahead with a huge probate fee hike, despite a consultation among legal experts and solicitors showing that only 2% were in favour of the reform for processing applications for grants of probate.
Probate fees are paid by Executors to process estates and allow families access to money and assets left to them. They are entirely separate from Inheritance Tax (IHT), which is charged at 40% on estates worth more than £325K. The fees are payable even if the entire estate is left to a spouse with no IHT to pay.
Probate fees are currently charged at a flat rate of £215 on any estate worth more than £5,000. However, the new bands to be introduced next month are as follows:
- Nil rate band for estates worth up to £50,000
- £300 for estates worth £50K to £300K – a 40% increase on current levels
- £1,000 for estates worth £300K to £500K – a 365% increase on current levels
- £4,000 for estates worth £500K – £1 million – a 760% increase on current levels
- £8,000 for estates worth £1 million to £1.6 million – a 3,621% increase on current levels
- £12,000 for estates worth £1.6 to £2 million – a 5,481% increase on current levels
- £20,000 for estates over £2 million – a 9,202% increase on current levels
The new fee structure has been widely criticised by lawyers, and dubbed a ‘stealth tax’ in addition to existing inheritance tax. Claire Davis, Director at Solicitors for the Elderly, said: “The increase in probate fees will place a burden on families at a sensitive and distressing time and is likely to put people who are vulnerable and/or elderly at risk.” It is also feared that the new rules could cause Executors problems, since probate fees will need to be paid up front.
The Government has defended its decision to raise fees, stating the move is necessary to subsidise other areas of the court system. “In order for our courts and tribunal system to continue to provide access to justice in the long term, we must look at ways to make sure that HMCTS is funded adequately now and in the future. As part of this, we must consider the case for increases in court and tribunal fees.”
At Chiltern Associates, our surveyors have extensive experience in dealing with probate valuations. If you are worried about the impact of the new fees and would like to discuss an urgent probate valuation with us, please don’t hesitate to get in touch by emailing firstname.lastname@example.org or calling 07973 306505.