The Government’s proposals are to move from a flat fee to a banded fee approach. The fees will be banded by the net value of the estate, with the highest fee payable being capped at 1% (£20,000). Currently there is no fee if the estate value is less than £5,000 and this threshold will be raised to £50,000. See below table with the proposed fee bands for probate applications.
| Value of estate (before inheritance tax) | Existing fee | Proposed fee |
|---|---|---|
| Below £50,000 or exempt | £215 | £0 |
| Exceeds £50,000 but does not exceed £300,000 | £215 | £300 |
| Exceeds £300,000 but does not exceed £500,000 | £215 | £1,000 |
| Exceeds £500,000 but does not exceed £1m | £215 | £4,000 |
| Exceeds £1m but does not exceed £1.6m | £215 | £8,000 |
| Exceeds £1.6m but does not exceed £2m | £215 | £12,000 |
| Above £2m | £215 | £20,000 |
Ann Donnelly says “This is extremely disappointing news given the negative response by lawyers to the consultation”
Like inheritance tax, all the fees will be payable in advance of the service being provided which could be problematic where people are asset rich but cash poor. Another impact of the new fees is that residuary beneficiaries of an estate may receive less.
As a result of these proposed changes, people may be looking to reduce the value of an estate whose net value is just above the new threshold and this needs to be considered in relation to the inheritance tax threshold. Ann Donnelly is a specialist in inheritance tax and estates and if you have any questions please contact her for free initial advice.