The Ministry of Justice has confirmed that it will go ahead with plans to substantially increase probate fees from May this year (the exact date is still to be confirmed).
There is currently a flat fixed rate for applications: £155 for applications made by professionals and £215 for applications made by an individual. These fees apply irrespective of the value of the estate. Estates under £5,000 do not incur a fee.
From May 2017, the new probate fees structure will be as follows:
|Value of estate (before inheritance tax)||Probate fee|
|Up to £50,000||£0|
|Exceeds £50,000 but does not exceed £300,000||£300|
|Exceeds £300,000 but does not exceed £500,000||£1,000|
|Exceeds £500,000 but does not exceed £1,000,000||£4,000|
|Exceeds £1,000,000 but does not exceed £1,600,000||£8,000|
|Exceeds £1,600,000 but does not exceed £2,000,000||£12,000|
These are significant increases and many commentators have described this as another tax arising on death. To put it into perspective, an estate worth in excess of £2,000,000 will now attract a fee up to 129 times greater than the current fee. An estate worth in excess of £1,600,000 will pay a fee up to 77 times greater.
On the other hand some commentators have argued that the new system is fairer, as estates under £50,000 do not have to pay any probate application fee at all, and the more moderate estates (from £50,000 up to £500,000), which make up the highest single proportion of estates, pay between £300 and £1,000.
You can find The Government Response to consultation on proposals to reform fees for grants of probate here.
At the very least this substantial increase in the probate application fee will make individuals more likely to consider lifetime giving as part of their succession planning to try to minimise the probate fee their estate would have to pay.
If you would like further advice, please contact Laura England on email@example.com or 01884 203054.