You may be aware that the government has apparently made a “U-turn” regarding their planned changes to the fees charged by the Probate Registry when applying for a grant of representation. If you were not aware of the proposed changes, it is important to consider them.
In brief, when a solicitor applies for a grant of probate the fee is currently £155.00 (with an additional fee being charged for any extra copies of the grant you request). It was proposed that from May of this year the Probate Registry would begin charging a fee determined by reference to the value of the Estate, as follows:-
- Estates worth more than £50,000 and up to £300,000 £300
- Estates worth more than £300,000 and up to £500,000 £1,000
- Estates worth more than £500,000 and up to £1,000,000 £4,000
- Estates worth more than £1,000,000 and up to £1,600,000 £8,000
- Estates worth more than £1,600,000 and up to £2,000,000 £12,000
- Estates worth more than £2,000,000 £20,000
In addition, for Estates worth £50,000 or less there would be no fee charged (an increase of the threshold, which currently stands at £5,000 only). In reality though, those in practice understand that more and more Estates nowadays do not even require a grant of representation if they are more modest in size.
If the government has made a “U-turn” on these changes, why is it important to still consider them? Well, it seems unlikely these proposed changes will simply disappear. It seems more likely they will resurface following the general election this June. The government had hoped to introduce these changes by way of a Statutory Instrument (effectively, a change that wouldn’t require an Act of Parliament), but this move was blocked by the Committee that oversees the same. The Committee were of the opinion the proposed changes probably required an Act of Parliament – and, frankly put, the government has a little more important matters to attend to than these changes right now (and it is fair to say these changes are unlikely to be popular).
If we assume for one moment that these changes resurface and are introduced what does that mean to you, apart from the obvious?
- If you have an Estate that is entirely exempt from Inheritance Tax due to reliefs or exemptions available (such as Agricultural Relief, Business Property Relief, Spousal Exemption, Charitable Exemption etc.), you still may find yourself landed with a significant fee to apply for a grant of representation.
- If you have ever taken steps to sever ownership of a jointly held property (or properties), your share of the same would be taken into consideration when determining the charge levied by the Probate Registry.
- If you are dealing with an Estate with significant assets in land, but minimal assets in cash, you may need to find a way to pay what could be a large fee to the Probate Registry before you can even begin administering the Estate (and this an issue we can see affecting the farming community in particular).
So, this issue has gone away for now, but shouldn’t be forgotten.