Will the rise in Probate fees affect you?

probate fees

The UK government has officially confirmed that probate fees in England and Wales will change in May 2017 to a banded system, where fees increase with the value of the estate, replacing the current flat fees.

No fee will be payable for estates worth less than £50,000, but the charges will increase rapidly beyond that, rising to a maximum of £20,000 for estates above £2 million. Probate applications will be excluded from the fee remissions scheme for individuals who cannot afford them.

The current fee payable on application for a Grant of Probate is £215 or £155 for those applying through a solicitor.

From May 2017 onwards, the fee scale below will be implemented:

Value of Estate Probate Application fee
Up to £50,000 Exempt
£50,000 – £300,000 £300
£300,000 – £500,000 £1,000
£500,000 – £1m £4,000
£1m – £1.6m £8,000
£1.6m – £2m £12,000
Over £2 million £20,000

A Grant of Probate is a document issued by a Probate Registry local to you, that confirms you are the appointed Executor of a Will or the next of kin of someone who has died and therefore the right person to deal with the bank accounts, shares, property and other belongings of someone who has died (the assets of the estate).

Depending upon the size and nature of the estate, you may need a Grant of Probate before you can do such things as close bank accounts or pay bills from a bank account. If you find you need to sell shares or sell a property you will definitely need a Grant of Probate.

Where probate has not yet been granted, Executors should consider applying before the fees increase in May.

Many will view the fee increase as a form of taxation given that fees will be based on the value of an estate. The fee increases could be problematic for asset rich but cash poor clients as it is understood that the fees would be payable upfront.

For those looking ahead at their own affairs – it is suspected that many will feel pressured to give away their assets during their lifetime to avoid the high fees. Transferring property to other family members such as children may seem like a straightforward way of avoiding Probate fees, however doing so is not without risk. Should those individuals go through divorce, end up in financial difficulty or pass away, the property may have to be sold. Placing the property or asset into a Trust is a safer option, but always seek professional advice before proceeding.

Please contact Helen Phillips or Paula Murphy for advice on 01792 468684 or email enquiries@pgmsolicitors.co.uk.

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