By Mark Foley
There, I suspect that got your attention. Journalese is not my strong point so I borrowed that from a tabloid newspaper. What they mean by death tax is usually inheritance tax, or possibly these days the coming storm about care fees (you read it here first), but on this occasion they mean probate court fees.
When someone dies and leaves an estate then the executors of the will have to apply to the Probate Court for a Grant of Probate, which is a court order recording that they have properly proved that they are authorised to deal with the estate.
The court charges a fee and huge increases in these are proposed to come into force.
The changes will result in a charge of up to £20,000, compared with the current fee of £215 (£155 when applying through a solicitor). This is arguably unfair, and executors are likely to run into problems.
Probate fees have always been paid in advance of obtaining the grant of probate and executors cannot access assets in the estate until they have the grant.
A lot of estates contain a property and possibly investments such as shares, which are not easy to realise, and not much cash.
The only real alternative is that the executor (or beneficiary?) can put up the money.
Does anyone have £20,000 to devote to this, even if only temporarily? Unlikely.
The proposed fees are:
|
Value of estate |
Proposed fee |
|
Up to £50,000 |
£0 |
|
£50,000–£300,000 |
£300 |
|
£300,000–£500,000 |
£1,000 |
|
£500,000–£1 million |
£4,000 |
|
£1 million–£1.6 million |
£8,000 |
|
£1.6 million–£2 million |
£12,000 |
|
More than £2million |
£20,000 |
The government insists that the plans will introduce a “fairer banded system”, in which more than half of estates will pay nothing and 92% will pay no more than £1,000. The money the fees generate will be used to fund the courts system, says the Ministry of Justice.
Well, I and every other solicitor I know will take that with a pinch of salt.
Why the change? Inheritance tax cuts to be implemented this year will benefit families with homes worth more than £650,000. The treasury is empty, and it needs the income from somewhere else, I think.
Will older people feel the need, or be pressured by families, to give away assets in their lifetime to avoid the charges? It is worrying.
- To discuss these issues or for help with your legal affairs, contact: Mark Foley, Solicitor. Tel: 07833 332055 or 01362 688946. Email