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The return of the 'Death Tax'

View profile for Caroline Dowding
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The return of the ‘Death Tax’ and the impact on farming families

Last February, we discussed the Government’s plans to significantly increase probate application fees - click here to read the blog

The changes, which were due to come into effect from May 2017, would have removed the fixed fee of £155 where solicitors make the application, and instead apply fees on a sliding scale, depending on the value of the estate. The maximum threshold would have applied to estates exceeding £2M and would have charged an eye-watering £20,000 to obtain the Grant.

After submitting a flurry of urgent probate applications to beat the prohibitive deadline, the government suddenly abandoned the proposals and we had hoped it was the last of the matter. Unfortunately, on 5 November 2018, the government announced that it will be reviving the proposals.

The new proposed fees have reduced slightly, but are still costly. For an estate valued between £500,001 and £1M the fee will be £2,500 and the highest fee for estates exceeding £2M will be £6,000.

The fees will be payable before the Grant is obtained and will be charged on the value of the estate before exemptions and reliefs have been applied, meaning that Agricultural Property Relief and Business Property Relief cannot be deducted before calculating the threshold.

It will be a huge burden for the executors of an estate, particularly where the estate has limited access to cash but has valuable land, as is the case for many of our farming clients.

It is proposed that the increases will apply from April 2019. Whilst this is a number of months away, collecting in details of assets and valuing land can take some time and so we advise that clients who have recently lost a loved one do not delay the administration process. If you need assistance in obtaining probate then please do not hesitate to contact our Agriculture and Estates team.  I am based at our Colchester office and can be reached on 01206 217 394 or caroline.dowding@birkettlong.co.uk.   

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