Wealthy families face £20,000 rise in probate fees
Families inheriting estates valued at more than £2m will have to pay probate fees of £20,000 under new proposals being put forward by the government. The move would also see the beneficiaries of much smaller estates paying no fee at all.
Under the current system, all estates worth more than £5,000 pay a standard probate fee of £155 when made by a solicitor and £215 if made by a beneficiary.
The government wants to introduce a sliding scale with fees increasing depending on the size of the estate. The minimum threshold would rise to £50,000. Ministers say this would mean 30,000 estates paying no fee at all.
Fees for estates valued between £50,000 and £300,000 would rise to £300. There would then be a sliding scale for estates valued between £300,000 and £2m. The maximum fee in this category would be £1,000. However, for estates valued at more than £2m, the fee jumps to £20,000.
A government statement announcing the proposals said: “Court fees are never popular but they are necessary if we are, as a nation, to live within our means. These proposals would raise around an additional £250 million a year, which is a critical contribution to cutting the deficit and reducing the burden on the taxpayer of running the courts and tribunals.”
Some legal experts have been surprised to see such a huge rise in fees for larger estates. They say it could lead to more people using legal ways of avoiding the fees and reducing inheritance tax. This could involve increasing the number of gifts to family members and placing more assets in trusts.
The government is now holding a public consultation on the proposals. We shall keep clients informed of developments.
Please contact us if you would like more information about the issues raised in this article or any aspect of wills and probate.