What are probate fees?
Probate fees in the UK are the charges made by the Probate Courts in England and Wales for the application and registration of probate. When an individual applies, the probate application fee is £215. However, if a solicitor makes an application the fixed fee is reduced to £155.00. Both are subject to VAT.
Probate fees increase in 2017
The cost of probate has been set since 1999 as a flat rate fee of £155 or £215, irrespective of the value of the deceased’s estate. However, in the budget of 2016 it was proposed by the government that this arrangement would change. The existing flat fee would be replaced in May 2017 by a new probate fees structure based on the value of the deceased’s estate. The more valuable the estate the greater the fee.
Rise in average cost of probate fees
The effect would be to increase the average cost of probate fees exponentially. While there would be no fee for estates valued below £50,000, in the case of the largest estates, for those over £2 million, this would mean a fee of £20,000.
The reason the government gave for the changes was to provide an estimated £145 million a year to fund upgrades to the court’s system. For example, one of the upgrades was to improve the on-line estate administration services with a view to making the DIY probate process more user-friendly for lay executors needing to obtain a grant of representation.
The proposals to change probate fees in 2017, however, were controversial. While the then Justice Minister, Lucy Frazer, said that the proposed reforms were essential to provide an effective modern service, the Law Society stated it was unfair and discriminatory to expect the bereaved to subsidise the justice system as a whole when they were only using one part, the probate service.
Who pays probate fees?
Although, the cost of probate is borne initially by the deceased’s estate it has a direct impact on what’s left to be distributed to the beneficiaries. The higher the fee the less there is available for bequests. And of course, It is not possible to avoid probate fees as the grant of probate is essentially the legal permission needed by the executors to administer the estate to deal with items such as property, bank accounts, life insurance, share portfolios and investments etc.
As probate application fees are paid on submission of the application, increases in them as proposed may prove difficult to fund, for example, if the estate is large but has insufficient cash assets to pay them or any inheritance tax liability. This may mean that executors must fund the application fee and other payments from their own resources and wait to be reimbursed, perhaps some months later, as part of the administration of the estate.
The proposed fees increase was criticised by many as a stealth tax as the increase in did not reflect the actual cost of processing the probate application. Despite the fact that it was so universally unpopular, the Probate Fees Order was pushed through parliament with a planned implementation of the increased probate fees for May 2017. It was only dropped when the then Prime Minister, Theresa May called a snap election for June 2017. Perhaps it was considered a vote loser.
How much are probate fees?
The government’s controversial proposal to charge higher fees re-emerged in November 2018. Essentially it was a re-hash of the original proposal, but recognising its unpopularity, minor adjustments were made. An estate of £300,001 – £500,000 would have had to pay £750, a more than double percentage point increase from the current £215 flat fee, while the largest estates of £2 million and over, would be charged £6,000. Although a huge increase it was much less than the original proposal of £20,000.
The table below shows how the revised probate fees are to be calculated. There are seven fee bands, with the fee increasing in line with the value of the estate.
Up to £50,000: £0
Above £2m: £6,000
The revised fee structure passed through the various committee stages in the House of Commons early in 2019 and was planned to be implemented in April. However, preoccupation with Brexit meant that there was further delay. The proposal was finally ditched in October 2019 when Justice Secretary Robert Buckland declared that the planned hike to probate charges was not fair or proportionate.
There is no guarantee that the government will not revive the proposal once again. However, for the time being, the probate application fee remains at £155 and £215.
Found this post helpful? Read more posts by Final Duties.