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.
In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
A local authority recently received a "roasting" by the Pensions Ombudsman for their delay in processing an employee’s ill-health retirement pension, following her diagnosis with advanced cancer.
The Times is looking for three or four charities to feature in their editions running in December 2019 and early January 2020.
Cliff Mills defines and talks about the importance of social value in his blog, and its potential within Greater Manchester.
Following a power outage at Anthony Collins Solicitors’ (ACS) Birmingham office, our employees and partners currently have limited functionality, including no access to emails.
Joint ventures present an opportunity for housing associations to build organisational capacity, the revenues from which could help deliver on wider social housing commitments.
Residents are now unable to make applications to prohibit landlords from seeking to recover the cost of legal proceedings through the service charge on behalf of other residents, without consent.
Natalie Barbosa summarises some of the legal challenges facing fundraisers in the charity sector.
We hosted a breakfast roundtable with Insider Midlands magazine that had attendees from a range of organisations addressing housing needs in the Midlands. The discussion explored JVs in more detail.
The decision of the Court of Appeal in The Harpur Trust v Brazel & Unison has made clear that employers can no longer legally calculate part-time holiday based on 12.07% of hours worked over a year.
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.