FT Adviser (26/11/2018) – Advisers have called the government’s plans to overhaul probate fees “absurd” and “unjustified” warning some 230,000 families will be hit with higher fees as a result.
The Ministry of Justice announced earlier this month it will pursue a banded structure for probate fees.
The current system sees a flat fee of £215 paid for all estates of more than £5,000 (or £155 for those applying through a solicitor), but the MOJ had said last year it planned to replace this with tiered charges ranging from £300 to £20,000, depending on the value of the estate before inheritance tax.
The charge will be calculated on the whole estate of a deceased person prior to the deduction of inheritance tax, and will include jointly owned assets.
No fee will be payable on estates below £50,000, but a probate fee of 0.5 per cent will now apply on estates valued at more than £50,000, with a cap of £6,000 for estates worth more than £2m.
The MoJ claimed the fee increase, which had been put on hold before the general election after causing an uproar, was necessary to fund the work of the courts and tribunals.
National adviser LEBC warned the move would mean approximately 230,000 families a year would have to pay more to access their loved one’s assets.
Alan Chan, director at IFS Wealth & Pensions, said: “It is absurd and is just another tax on the deceased’s family members, hitting them hardest at the most difficult time of their lives. Inheritance tax of 40 per cent is already quite high, and now individuals also need to factor in potentially significant probate fees too.
“For most people living in London, properties values alone will take them into the higher brackets of probate fees. Even if costs have gone up, it’s hard to justify a near 20-fold increase in probate fees overnight.”
Full article link: https://www.ftadviser.com/pensions/2018/11/26/advisers-slam-absurd-probate-fee-increase/
