Probate fee changes – what they will mean for you and when!
In the past year, there have been many mentions on probate fees increasing and how these will affect the bereaved. But with the rise due to have taken place back in April, and still not have been passed by Parliament, when can you expect to see the changes implemented?
Due to Brexit taking up a lot of Parliament’s time, the fees amendments having been put on hold until later in the year, or possibly later, depending on when Parliament can dedicate time to pass the law.
Gatwick-based accountants, Richard Place Dobson, are here to share their advice.
When can we expect the law to be changed?
In order for the fees to be changed, they need to be approved by Parliament. This means that the legislation will be read out in the House of Commons and if any MPs object to the amends, it may lead to the whole House voting on the legislation.
Although it’s very rare for this type of legislation, the probate fee changes could be voted down and would therefore not become law. But if it were to be approved, an order would be made and the new fees would come into force 21 days later.
There is currently no set time for this legislation to be read due to the enormity of Brexit.
What can we expect if the law is passed?
Currently, there is no fee for an estate that is worth under £5,000, and a fee of £215 if the estate is worth over £5,000. Under the proposed changes, the flat rate fee would be replaced with a fee system based on the value of the estate.
To get probate, the person dealing with the estate must have submitted an Inheritance Tax account to HMRC. But the account does not need to have been fully processed to apply for probate, so with the fee changes looming, it could be worth applying sooner than later to benefit from the current fees, if the estate is large, as the fees that were in place at the time of application, not death, will be applied.
If the new legislation is passed, the following fees, before Inheritance Tax, will apply in England and Wales based on the size of the estate left behind (e.g. property, land, businesses owned, cash, stocks and shares, valuables, cars, debts):
- Up to 50,000 = £0
- £50,001 – £300,000 = £250
- £300,001 – £500,000 = £750
- £500,001 – £1,000,000 = £2,500
- £1,000,001 – £1,600,000 = £4,000
- £1,600,001 – £2,000,000 = £5,000
- £2,000,000 and over = £6,000
Many people have viewed the proposed rises as a ‘stealth tax’, however, the fees are not taxes and it’s been predicted that approximately 25,000 estates will benefit from the above fees by not having to pay a fee. The Government has also predicted that 80% of estates will pay less than £750, with 60% paying a similar fee to the current scheme.
How can I find out more?
Probate is the process of obtaining the legal right to distribute property, money, and possessions of a deceased person’s estate. The process can be complicated and take a lot of time, with the average estate taking up to nine months to complete.
For more information on the process and how we can assist with the process, visit our probate page, and get in contact with us on 01293 521191.