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Government resurrects the new 'death tax'

View profile for Katie Hayden
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It was announced recently that the government plans to reintroduce a hike in probate fees. Plans were dropped back in 2017 ahead of the general election after a furious backlash, as it was felt that the increase in price with regards to the application for a Grant of Probate amounted to an unfair ‘tax.’

Despite the uproar caused last year, it seems the government is keen to carry on with its plans to introduce a sliding scale based on the value of the estate. What is the reasoning for this, you may ask?  To help ‘plug a shortfall in the £1.6billion cost of the courts service.’

Currently, the fee for obtaining probate is £215 for individuals and £155 for those applying through a solicitor. However, Justice Minister Lucy Frazer announced that from April 2019, the levy will range from £250 to as much as £6,000 for estates estimated at over £2 million. Although this is a significant reduction on the £20,000 fee planned last year, I feel it hard not to see this as a ‘tax’ on those who already pay inheritance tax.

The Ministry of Justice insists the fees will not exceed 0.5% of an estate and “will never be unaffordable”, however I fear that executors will be forced to resort to taking out loans to cover the fees in the interim, as assets are frozen until the Grant of Probate has been obtained.

I feel it is important to add that if the estate is valued at under £50,000, there will be no fee to pay. However, as we see in practice, this is not a common occurrence. I can only hope that matters will become clearer once a guidance document has been published before this Statutory Instrument comes into effect.

Should you have any concerns about the prospective fee increases, wish to talk to someone about effective inheritance tax planning or obtaining probate, then please to do not hesitate to contact us.

I am based in our Chelmsford office and can be reached on 01245 453837 or katie.hayden@birkettlong.co.uk.

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