Probate fee changes: what you need to know - Spear's

Probate fee changes – an experts guide on what you need to know

Probate fee changes – an experts guide on what you need to know

Apply for probate at a lower cost, but also to understand what the changes are and how they might be impacted, write Sophie Rowe, Claire Tyrrell and Ray Bennett

Last week, many families would have breathed a sigh of relief after hearing the news that the Ministry of Justice has pushed back the introduction of the new probate fees due to political focus on Brexit and being unable to secure an opportunity to schedule a motion in parliament to bring forward the Bill.

Families should use this extra time to apply for probate at a lower cost, but also to understand what the changes are and how they might be impacted.

The supposed hike will see the current flat fee (£215 for individuals and £155 for those applying through a solicitor) replaced by a sliding fee scale based on the value of an estate.

The proposed reforms are subject to an approval motion in the House of Commons, after which the Order will be made. The approval motion has not yet been scheduled but we have been informed that the new fees will come into force 21 days after this Order is made.

Currently, an estate valued at over £5,000 is subject to a fixed probate fee of £215 for individual applicants and £155 for those applying through a solicitor. Estates worth less than £5,000 are exempt. Under the new plans, the threshold will increase from £5,000 to £50,000, saving an estimated 25,000 estates from having to pay a fee.

The full fee structure is as follows:

£0 – £50k                     £           –

£50k – £300k               £    250.00

£300k – £500k             £    750.00

£500k – £1m                £ 2,500.00

£1m – £1.6m               £ 4,000.00

£1.6m – £2m               £ 5,000.00

£2m+                           £ 6,000.00

 

If you are in the process of applying for probate and can expedite the application this is worth considering. HMRC are advising solicitors and the public to submit their applications to the Probate Registry as soon as possible alongside a covering letter explaining that the receipt for IHT will follow.

It is worth noting that the fees are calculated on the net value of the estate for the Grant of Probate. You need to work that out and then see where your estate sits on the fee scale. You then may be able to take some simple steps to reduce the net value and the fee.

Certain assets are automatically excluded when calculating the net estate for probate. For example, property held as ‘joint tenants’; jointly held bank accounts; life policies which are held in trust; and any foreign assets will not be included in the net estate for this purpose.

In the longer term – check how you own your property – if you own it with someone else as ‘tenants in common’ consider changing this to a ‘joint tenancy’.

Can any of your sole accounts be held jointly with anyone? Check that your life insurance policies are written into trust.

You can, of course, simply give your assets away in your lifetime. This is an easy solution to reduce your estate if you find yourself on a fee scale boundary but it may not be suitable for everyone.

Before acting on the options available seek advice regarding your circumstances to establish the best way to move forward for you personally.

Sophie Rowe, Claire Tyrrell and Ray Bennett all probate managers at Cripps incorporating Pemberton Greenish



 

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