19th February 2016
The government is planning a huge hike in probate fees that will hit families who are left to deal with estates worth more than £300,000.
Probate fees are currently charged on a flat-rate basis of £215 for individuals with estates worth more than £5,000 but fees will now increase according to the value of the estate.
For families whose loved one leaves an estate worth more than £2 million, the fees will soar 920% to £20,000. However, the threshold at which estates have to pay probate fees will be increased from £5,000 to £50,000 meaning an extra 30,000 people will be exempt.
A probate is granted when a person dies and gives the executor the right to deal with the deceased’s estate, including bank and building society accounts that will typically be frozen.
The probate process is lengthy but the government is currently consulting on how to simplify it, but is also looking at increasing the fees.
The hike in probate costs would raise £250 million a year for the government. Justice Minister Shailesh Vara said the money will be a ‘critical contribution to cutting the deficit and reducing the burden on the taxpayer of running the courts’.
He added that only the ‘very wealthiest’ will pay the maximum fee and that fees would be capped at 1% of the value of the estate.
The new fee structure being proposed means estates worth up to £50,000 will not pay a fee, and estates over this amount will be charged based on a tiered structure;
£300 for estates between £50,000 and up to £300,000
£1,000 for estates between £300,000 and £500,000
£4,000 for estates between £500,000 and £1 million
£8,000 for estates between £1 million and £1.6 million
£12,000 for estates between £1.6 million and £2 million
£20,000 for estates worth more than £2 million
Vara said: ‘We also want to see a simpler, more streamlined process for probate applications, moving from a paperbased to an online system.
‘This will make the probate service much easier to navigate so the experience of the bereaved is as simple and hassle-free as possible, reducing worry for executors at what is often a very difficult and distressing time, and enabling most applications to be completed online and, we hope, without expensive professional advice.’