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The government has announced that the controversial increase in probate fees proposed under former Prime Minister Theresa May has been axed, according to the Daily Mail.
The proposed increase in probate fees would have landed grieving families with an additional death tax of up to £6,000 pending on the size of the estate. When the proposals were originally introduced in 2017, estates worth over £2million were going to be liable for probate fees of £20,000 payable to the Ministry of Justice. However, lobbying from groups like STEP (Society of Trust and Estate Practitioners) forced the government to reduce the fees and then to eventually drop them altogether. Families current pay probate fees of £215 to HM Court Service when applying for a Grant of Probate or Letter of Administration to get control of a death person’s estate.
The Secretary of State, Robert Buckland told the Daily Mail that he had decided the policy was not ‘fair and proportionate’. The new rules had been waiting parliamentary approval for months but have finally been withdrawn.
Mr Buckland was appointed Secretary of State for Justice and Lord Chancellor by Prime Minister Boris Johnson in July. He was not publicly involved in the creation of the new fee scale, which was first devised in early 2017 but then temporarily scrapped because of the snap general election.
It was resurrected in November 2018, this time with a £6,000 cap on fees instead of the GBP20,000 proposed in 2017. However, it still met considerable opposition from the professions and the media. The new death tax hike also caused a rush of probate applications submitted early to pre-empt the probate fees rise, which caused a serious backlog that the Probate Service is still dealing with.
Charities also objected that it might deter people from leaving charitable gifts in their Wills. Rob Cope, Director of Remember A Charity, said he was ‘hugely relieved’ at Buckland’s announcement. ‘Charities large and small rely heavily on gifts in wills, worth around GBP3 billion a year’, he said. ‘We can’t afford to risk jeopardising such an important income stream or to reverse the trend for growth in legacy giving.’
STEP welcomed the news that the government has decided to scrap the proposed increase. STEP Technical Counsel Emily Deane TEP said: ‘This follows many months of work by STEP and many others to highlight the unfairness of the proposed increase, which amounted to a stealth tax on the bereaved. This at last brings an end to the uncertainty and worry that these proposals have caused to grieving families.’
Grieving families can still be hit by Inheritance Tax at 40% on the value of estates worth more than £325,000 unless the whole of the estate is left to a surviving spouse. Other exemptions and reliefs are available but they require careful planning to ensure that they are not wasted. Inheritance Tax is at a record high, generating revenue of over £5billions for HM Treasury every year. A professionally drafted Will can help you to make sure you don’t pay too much Inheritance Tax so that you can pass on as much as possible to your loved ones.
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