Changes to probate fees will shortly be implemented – with significant consequences for deceased estates.

For many years, there has been a flat-fee charge for probate application – £155 for solicitor applications (plus 50p per office copy of the probate required) and £215 for personal applications. These fees have applied to all estates with values exceeding £5,000.

This system will all change soon. Although the exact date of the change is presently unknown, it is likely to be in or around April 2019 and will have a significant impact on estate administration and the costs of dying.

The New Fee Structure

The new probate fees will apply on a sliding scale based on the value of an estate. Although still to be confirmed, the current proposals are for probate application fees between £250 and £6,000.

Estate value Proposed probate application fee
£0-£50,000 £0
£50,000-£300,000 £250
£300,000-£500,000 £750
£500,000-£1 million £2,500
£1 million-£1.6 million £4,000
£1.6 million-£2 million £5,000
Over £2 million £6,000

These massive fee increases are widely seen as a ‘stealth tax’ on estates, and will not be popular. However, they look set to be implemented – with the only consolation being that they are less than 2017’s proposal, where fees of up to £20,000 would have been payable.

Regardless as to your views on the fee or ‘stealth tax’ position, the reality is that these fees will have a significant impact on the costs of estate administration and will add to the ‘to-do’ list and pressures upon grieving families – adding yet another cost to the business of dying. Current estimates suggest 1 in 5 families will need to find at least £2,500 for a probate application.

Executors will need to factor in finding sufficient funds to pay for the cost of the probate application as well as any inheritance tax due before the grant of probate can be issued – no doubt adding to potential delays and pressure on cash flow in estates.

For many estates, the main asset is a house that cannot be sold without a Grant of Probate – but there may not be enough cash available to meet funeral costs (as the first debt of the estate), inheritance tax and these increased probate application fees. This will present a challenge for executors and also those planning their estates to minimise the impact and issues faced by their families on death, so thinking about the issues at an early stage will be a must.

Further information

For more information on estate planning, probat and estate administration and will preparation, please contact Donna Holmes or Lisa Whitehouse.