An overwhelming majority of respondents to the consultation
(including ourselves) opposed the proposals but it seems likely
that the Ministry of Justice will be pushing on regardless.
The proposed increase is being implemented to address the
shortfall in income identified by the Ministry of Justice. In
2014/2015, the Court and tribunals administered by HMCTS cost
£1.8 billion, but only £700 million was received in
income. The proposed changes are expected to raise an additional
£250 million a year and will supposedly make the Probate
The current Probate fee for all estates above £5,000 is
£155. If your estate is below £5,000 then there is no
fee payable. The proposed changes, due to take effect in May, will
see the Probate fee calculated upon the size of the estate. The
proposed new fee structure is shown below:-
Interestingly, there is no difference in the cost of processing
a Probate application if an estate is worth £50,000 or
£750,000, yet the fee charged will be £3,700 more.
Furthermore, Probate Registries are currently self-funded. It is
clear therefore that the increase will be subsidising civil claims,
which, unlike probate fees, are voluntary.
The new fees will apply even if your estate passes to your
spouse or to charities. Whilst the amount of Inheritance Tax your
estate may have to pay can change depending on the beneficiaries of
your estate, the new fees will be payable by all.
It is easy to foresee the problems that will arise from such an
increase. People will try to ensure assets pass without the need
for Probate by using inappropriate Trusts, or by transferring
assets into joint names, which creates numerous risks.
A further problem is how the applicants will raise the fee
required. The fee needs to be paid before the Grant of Probate will
be issued. There is therefore now a burden on the Executors of the
estate to raise the necessary funds, before they have access to the
deceased's assets. Certain banks and building societies will
release the deceased's funds in advance of the Grant of Probate
being issued, in order to settle Inheritance Tax or funeral costs.
It has been suggested in the consultation paper that such an
agreement will also extend to the new Probate fees.
However, if the estate has insufficient cash assets, then the
applicants will have to raise the funds themselves. This can put
added pressure and stress on an Executor, as well as a significant
financial burden, which although they will eventually be able to
recoup from the estate, could take several months depending on the
sale of the estate assets. There will also be a delay to the
Probate process whilst the funds are arranged.
The proposals have recently attracted media attention,
especially after the Chancellor's budget speech last week.
Conservative MP, Jacob Rees-Mogg, criticised the proposals in the
House of Commons as a 'stealth tax' and the Society of
Trust and Estate Practitioners (STEP) have condemned the sharp
increase as a new tax on bereaved families.
Strangely, the Office of the Public Guardian, an agency of the
Ministry of Justice, have announced that from 1st April 2017, the
registration fee for a Lasting Power of Attorney will fall from
£110 per document to £82.
Further information is expected shortly as the draft Statutory
Instrument has now been published. In the meantime, if wish to make
your objection to the proposals known, an online petition is
currently gaining support which can be signed by clicking here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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There is no question that Mr and Mrs Owens are both unhappy with their current position, and the Court of Appeal judges were equally unhappy with the current legal position. The question is what should be done.
A well-meaning friend, relative or even a carer of a deceased person may take what they believe are helpful steps to tidy up a deceased’s affairs in the days following their death to pave the way for those who will carry out the administration of the estate.
The law in relation to the treatment of non-matrimonial assets in the English Family Courts continues to evolve and JL v SL ( EWHC 360) is the latest to join the alphabet of cases dealing with this issue.
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