Probate Court Fees to Rise in May 2017
In order for the Personal Representatives of a deceased person to either prove a Will or to act where there is no Will (under the rules of intestacy), a Grant needs to be issued by the Probate Registry.
Without this, access to the deceased’s bank accounts, shareholdings and the ability to sell their property is usually either severely limited or impossible where they were in the deceased’s sole name. Some funds will be released, such as the payment of the funeral directors’ invoice, or to meet Inheritance Tax, but generally all assets are frozen until the Grant is obtained, which then proves that the Personal Representatives have the right to deal in the deceased’s assets.
To obtain a Grant, a paper application is sent to the Probate Registry together with a fee charged by the Registry to cover the costs of processing the paperwork. At present, this fee stands at either £215.00 for an application made in person or £155.00 if the application is made by solicitors (with an additional 50p for each copy of the Grant required). This fee is generally met by the Personal Representatives out of their own pockets and reclaimed later from the assets in the estate.
However, as from May 2017, and flying in the face of an overwhelmingly negative response from professional bodies to the proposal, the Government is planning to bring in a new set of Probate fees based on a banding system – the larger the value of the estate, the higher the fee.
Whilst there is something to be said for this, and indeed a banding based fees system did exist in the past, the increase in the fees is startling. The following table, produced by the Probate Registry, lists the new fees and their estimated proportion of the values of the estates they handle.
Value of estate (before inheritance tax)
Proportion of all estates in England and Wales
Up to £50,000 or exempt from requiring a grant of probate
Exceeds £50,000 but does not exceed £300,000
Exceeds £300,000 but does not exceed £500,000
Exceeds £500,000 but does not exceed £1m
Exceeds £1m but does not exceed £1.6m
Exceeds £1.6m but does not exceed £2m
Whilst the impact on the lowest value estates is not so pronounced (a reduction to nil or a mere doubling of the fees), with house prices being what they are, even a modest family home and some hard won savings will result in a dramatic increase in an upfront payment which the executors must find from somewhere. The Government’s suggestions? Get a loan, or the Personal Representatives can pay themselves as “any additional difficulty in paying the fee will be temporary only”. How nice to have a spare £20,000 knocking about that you won’t miss for a while. Other proposals include agreements with banks for releases of funds from accounts or even the absurd situation of an application to the Probate Registry for an authority to encash a particular asset in order to pay for the fees, which will no doubt increase costs and delay the Grant further.
For assistance in administering estates and in dealing with Inheritance Tax, please contact Alastair Liddiard in our Private Client team.
Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.