In recent years the Probate Court Fee has been a flat fee of £155 if a solicitor submits the papers for every estate worth over £5,000 with 50p payable for every extra sealed copy of the court document the Executors need.
The Government proposes to increase these fees dramatically as follows so that the minimum fee for estates over £50,000 will be £300 increasing as follows.
Whilst it might seem fairer to have a system of tiered charges, based on the value of the estate – and there will of course be those that say only the very wealthiest will bear these costs, have the practical issues such as access to cash prior to the grant of probate to enable these fees to be settled really been thought through?
This fee has to be paid before the Executors can access the deceased’s funds. It is hoped that banks etc. will let the deceased’s money be used to meet these costs; if not or, as may well be the case if the deceased merely had a valuable house, there is insufficient cash, the Executors will have to borrow. Where a solicitor is used to apply for the grant of probate, it is quite common for Solicitors’ to 'front' the probate fees, recovering them as soon as the Grant of probate has been received. That is highly unlikely to continue to be possible with fees of up to £20,000. Lending money to fund the probate process could prove to be a very difficult course of action in the current climate. In the past the banks would often charge a fee as well as interest for allowing an Executors’ loan.
The Government does not propose any reliefs or remissions.
It is only a few years since the Government introduced the flat fee arguing that the Probate service was not meant to make a profit but merely break even. The Government does not explain what has changed – only to say it needs more money for IT changes.
For many this increase will be a very significant tax at what is already a very stressful time.
When won’t the charge apply?
If the asset is not in the name of the deceased when they die the tax will not be due. One option is to put in the asset in the names of “bare trustees”/nominees. In this way you still own the asset for all purposes but it can be transferred without the need for probate on death. You will need to choose your nominees very carefully and this planning should only be considered in the context of your wider plans and objectives. Any outright gift or more complex trust will have immediate tax implications as well as risk other issues.
The transfer may trigger other charges but they should not be as steep as the “Probate Tax”.
If you would like to discuss this further please contact Lisa Whitehouse, Donna Holmes or Alex Elphinston.
The monthly round-up from the Anthony Collins Solicitors charities team.
In this ebriefing, we identify what we see as the key messages arising from recent prosecutions in the care and housing sectors.
A recent High Court case on costs could prove essential reading for clients who have cases in the magistrates' courts.
The employment and pensions team offer practical advice on whistleblowing.
Partners, David Alcock and Sarah Patrice, have been involved in reviewing the new Code of Governance for community-led housing, published on 21 May 2021 by the Confederation for Coop Housing.
Following the eviction ban being lifted on 31 May 2021 and further to our previous ebriefing, the new notice of seeking possession forms are now available on the Government website as Word versions.
The European Court of Justice's standpoint on the Wiener Wohnen landowning developer case, and how the level of influence over the work did not amount to a decisive influence.
The Law Commission's Technical Issues in Charity Law report revealed that many charities struggle with a range of technical issue in the law.
The Law Commission recommended four key changes to the law in respect of mergers and the incorporation of charities which we have detailed in this ebriefing.
Over the last few weeks, we have published individual ebriefings on some of the key changes to be implemented following the Government’s response to the Law Commission’s report.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.