The MOJ has announced this week that it wants to increase the amount generated from applications for grants of probate by £250m and has invited comments on its proposal by 1 April 2016.
At present there is a flat rate fee of £155 when an application for a grant of probate is made through a solicitor and £215 when the application is made by an executor in person. Where the estate is worth less than £5,000 there is no fee to pay.
The MOJ are inviting views on proposals that the fees should be increased to arrange starting at £300 and going up to £20,000 depending upon the value of the estate. However the suggestion is that the value of estates where no fee is payable should be increased from £5,000 to £50,000.
The details of the new banded approach are set out below:
| Value of estate | Current fee | Proposed fee |
| £0 – £5,000 | £0 | £0 |
| £5001 – £50,000 | £155 | £0 |
| £50,001 – £300,000 | £155 | £300 |
| £300,001 – £500,000 | £155 | £1,000 |
| £500,001 – £1,000,000 | £155 | £4,000 |
| £1,000,001 – £1,600,000 | £155 | £8,000 |
| £1,600,001 – £2,000,000 | £155 | £12,000 |
| >£2,000,000 | £155 | £20,000 |
The same fee would apply whether the application is made by a solicitor or an individual.
Therefore, even in the case of a relatively modest estate of £500,000 the increase is around 640%. The increase proposed for a large estate would be significantly higher.
The fee will be payable:
- on the value of the estate prior to the deduction of any inheritance tax (IHT) liability;
- by families prior to their being able to access the estate assets at a time when executors and families already may need to cash in assets of their own or borrow to fund IHT liabilities which also have to be paid before the grant of probate is issued.
The increases would amount to a further tax on death in addition to IHT which will already be payable on the value of many of the estates most severely affected by the increases. If the increases are introduced they will emphasis that the failure to plan ahead and to put a well draft Will and other succession planning measures in place will be costly both from an IHT and a probate court fee point of view.
Ian Newcombe is a partner and leads the private client team in Exeter. If you would like to contact Ian, please call 01392 210700 or email private.client.exeter@stephens-scown.co.uk.