Be aware. Upcoming proposed changes to probate fees.

Image of Be aware.  Upcoming proposed changes to probate fees.

By Katie Wigham.  Solicitor.  Wills, Probate and Trusts.

The government is proposing to introduce a new fee structure for obtaining a grant of representation (‘a grant’) following the death of a loved one.

The new fees are proposed to be implemented in April 2019 and are based on a sliding scale, increasing in accordance with the value of the estate. Probate fees are currently a flat fee of £155 if you use a solicitor or higher for personal applications. Under the new rules, a sliding scale of fees will apply up to a maximum of £6,000, meaning a considerable increase for many estates.

What is a grant?
A grant is a document obtained from the Probate Registry confirming the authority to deal with an estate of a deceased person.  Normally, it is referred to as a grant of probate if there is a valid will or a grant of letters of administration if there is no valid will.    

When is a grant required?
Most banks and other financial institutions require a grant before they will release funds. You do not usually need to obtain a grant if the value of the estate is below £5,000. Where the estate includes a property in a deceased person’s sole name, a grant will always be required.

What are the changes?
From April 2019 the new proposed probate fees are as follows:

Value of estate at date of death      Probate Fee      
Up to £50,000 £0
£50,000 - £300,000 £250
£300,000 - £500,000 £750
£500,000 - £1 million £2,500
£1 million - £1.6 million £4,000
£1.6 million - £2 million £5,000
Above £2 million £6,000

The main benefit of the fee changes are that estates under £50,000 will not have to pay any probate fees. However, there are concerns for larger value estates that the fees are effectively a form of taxation on estates which, in many cases, are already subject to inheritance tax.    

Another concern for the people dealing with a deceased person’s estate is how these fees will be funded as there is often no access to funds until a grant has been obtained.  Currently, if a solicitor is instructed to assist with an estate, they will often pay the probate fees and claim them back once funds have been received.  Once the new fees are implemented, this is unlikely to be possible.  This could have a significant impact on the people dealing with the estate and may mean that they need to fund the fees personally and claim them back or take out a loan (unless the bank will release funds prior to a grant being obtained).  

It will also, in many cases, reduce the amount which beneficiaries (including, in some cases, charities) receive from an estate.  

If you are concerned about the impact of the changes and need help in dealing with a loved one’s estate or planning for your own future, please contact a member of our experienced team who will be happy to assist.