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:
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