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MoJ probate fee hike will see £500k estate pay 10 times more than now

7 November 2018

The cost of probate could increase by thousands of pounds following an announcement from the Ministry of Justice (MoJ) that a tiered fee structure will be introduced.

While the detail remains unclear, the MoJ has specified that fees will not exceed 0.5% of the value of the estate; however, this could still equate to a substantial cost.

In a statement, the MoJ called its new banded fee a “fair and more progressive way to pay for probate services”, compared to the current flat fee.  By raising the estate value threshold from £5,000 to £50,000 it will exempt around 25,000 estates annually from paying fees. See table below.

The reform of the probate service will also allow people to apply for a grant of probate online and assisted digital support will be made available for those who require it.

However, Rachael Griffin, tax and financial planning expert at Quilter, said the changes will mean a heftier sum for those with larger estates – a £500,000 estate will pay 10 times more at £2,500

Griffin said: “The replacement of the flat rate probate fee of £215 (or £155 if using a solicitor) will likely mean people with large estates will face extortionate fees and with property values at historically high levels the number of estates falling into a top band are likely to be quite high.”

While the MoJ said the money raised will be spent on running the courts and tribunal service, Griffin said it would still mean people, particularly those at the top end, will be paying disproportionately for the administrative work involving probate and will add further complexity to estate planning.

She added: “Despite the reassurances, it’s hard not to see this as a stealth tax on those who already pay inheritance tax. Easing the burden on lower estates and lifting 25,000 annually out of probate is admirable, but it still means for others they will face a steep fee during an emotional and challenging time.”

Griffin said the use of trusts could help to reduce the value of an estate for inheritance tax purposes, meaning a lower charge will apply.

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