Will the new ‘stealth tax’ probate fee affect you?

By 5th March 2019 Probate No Comments

As you might have already heard, new probate fees have been approved by the Government and will come into force in April 2019.

The controversial increase was classified as a “fee” rather than a tax, which meant the legislation could be passed by a statutory instrument which receives less Parliamentary scrutiny than a bill. However, The Law Society has branded the new fee a “stealth tax”.

Although there has been criticism of the way the fees have been introduced, they might actually represent a cost saving for a lot of estates in the North East.

What are the exact charges?

The so-called ‘stealth tax’ will be linked to the size of estates with the wealthiest estates facing a £6,000 probate charge.  These probate charges will replace the current flat fee of £215 without a solicitor or £155 for those applying through a solicitor, on estates of any size.

The fees will not have a huge impact on most estates in the North East as estates worth less than £50,000 will not be charged and estates priced from £50,000 to £300,00 will be charged £250.

The fees are mostly going to hurt small business owners and wealthy families. Estates worth more than £2m will have to pay a maximum charge of £6,000 which is a 2,690 per cent increase on the current charge.

Estates worth between £1.6 to £2m will be charged a £5,000 fee, while estates prices between £1m and £1.6m will attract a fee of £4,000.

Although there have a lot of different opinions on this matter the justice minister Lucy Frazer said this change is progressive and it would help raise £145m in the next financial year, which would be essential to fund court services.

Previously only estates under £5,000 were exempt now with the new fee 25,000 estates a year will be removed from paying probate.

Here is a summary of the new fees and the difference from the old system:

newprobatefeestable

If you need more information or if you expecting to inherit property, please get in touch.

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