Probate fees from April 2019

The government has revisited its controversial proposals to increase Probate Application Fees and have announced a new banded structure that will apply to applications from April 2019. The current flat rate fee of £155 (if using a solicitor) or £215 (if making a personal application) is to be replaced by a charging structure that is linked to the size of the estate.

The Ministry of Justice say the increased fees are to be reinvested in the court system. However many families will view this tiered charging regime as an additional tax on estates that may already be exposed to 40% IHT.

Fees from April 2019:
  • Estates up to £50k: exempt from probate application fees
  • Estates between £50k and £300k: £250
  • Estates between £300k and £500k: £750
  • Estates between £500k to £1m: £2,500
  • Estates between £1m and £1.6m: £4,000
  • Estates between £1.6m and £2m: £5,000
  • Estates above £2m: £6,000

Although the small estate exemption is welcomed, those higher value estates are faced with disproportionate fees for an administrative process. For example, an estate with a value of £600k will incur a fee of £2,500 which is more than ten times the current rate. Will there be a surge of probate applications before 1 April 2019 to take advantage of the existing fee structure?

In addition, concerns have been raised about the ability of executors to pay the probate fees which are due on application. For example, if bank accounts are frozen or other assets held in the sole name of a late husband being passed to a wife, they will be included for probate purposes and inflate the probate fees but will not be subject to IHT.

What may be viewed as an additional tax could encourage people to hold assets jointly as opposed to tenants in common so that they pass by the survivorship rules, as opposed to under the terms of the Will. This can be effective and appropriate in some circumstances, but it may lead to inequality, for example between children in second marriages.

The above highlights the need for individuals to seek appropriate advice about Will Structures and Life Time Planning. It is recommended to then revisit it every five years, or sooner if there are any events or concerns for the person making the will or plans or anyone that is likely to benefit from their wishes.

If you wish to discuss Estate Planning further (including IHT, trusts and personal tax) please contact our team on 01903 234094.

A version of this blog originally appeared on the website of MHA member firm, MHA Moore and Smalley.