Government announces big changes to probate feesNovember 08 2018
The Government has announced new plans to revamp probate fees in England and Wales, which could drastically change how much your loved ones have to pay when you die.
If you’re managing a loved one’s estate after they die (including cash, property and possessions), in most cases you will have to apply for probate. If the estate is worth over £5,000, you’ll currently have to pay a flat fee of £215.
But the new fee structure means that fees are only payable on estates over £50,000. According to Ministry of Justice, over 25,000 estates every year won’t have to pay any fees from April 2019.
For those with estates worth over £50,000, probate fees are now on a sliding scale, depending on the overall value of the estate:
- Estates worth between £50,000 and £300,000 will pay £250 – a rise of £35.
- Estates worth between £300,000 and £500,000 will pay £750 – a rise of £535.
- Estates worth between £500,000 and £1 million will pay £2,500 – a rise of £2,285.
- Estates worth between £1 million and £1.6 million will pay £4,000 – a rise of £3,785.
- Estates worth between £1.6 million and £2 million will pay £5,000 – a rise of £4,785.
- Estates worth more than £2 million will pay £6,000 – a rise of £5,785.
The value of an estate includes money in bank accounts, pensions, investments, property such as houses, personal possessions, and payments such as life insurance pay-outs or pension ‘death benefits’.
As part of the new system, people will be able to apply for a grant of probate online, with assisted digital support, which aims to make the process easier for individuals managing an estate after the death of a loved one.
“The Government is investing £1 billion to modernise and upgrade the courts system so that it works even better for everyone,” said Justice Lucy Frazer QC MP as she announced the changes on November 5. “But such a courts system is simply not possible without proper funding.”
However, some critics have called the fee changes a “death tax”, arguing that the process of granting probate is no more complicated for an estate worth several millions than an estate worth a few thousand pounds.
“The new charges bear no relation to the cost of probate, and are simply another form of taxation, sneaked in through the back door,” said George Hodgson, chief executive of the Society of Trust and Estate Practitioners.
“The Government has failed to explain why it is choosing to place this burden on bereaved families, many of whom will have spent months or years paying expensive care fees for their elderly relatives.”
The changes will be effective from April 2019 onwards. The new fee structure won’t affect Scotland and Northern Ireland, where the process for applying for probate is different than England and Wales.
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To find out more about the changes and how to apply for probate, visit www.gov.uk.