🔔 Probate Fees for some to rise by more than 2500% next year

This week, it’s been announced that the heavily-criticised plans to increase probate fees are going ahead.

On average, a total of 220,000 probate applications are processed each year at a current cost of £155 - £215 per application - depending on whether a professional is engaged in the process*.  

The Ministry of Justice postponed a planned increase in probate fees following the snap election on 8 June 2017, as there was insufficient time for the Government to push through all of its legislative agenda before Parliament was suspended in preparation for the country going to the polls.

Proposals to re-introduce a tiered fee structure for Probate, which were heavily criticised at the time, were announced to Parliament on 5 November by Parliamentary Under Secretary of State for Justice Lucy Frazer QC MP, who confirmed that "we have listened very carefully to the concerns raised and under today’s proposals we have revised fees so that they will never be more than 0.5% of the value of the estate".

The proposed new fee structure will see estates valued over £2 million paying probate fees of £6,000! Whilst this is significantly less than the original proposal of £20,000 (2017) it is still a considerable increase and as there are no regional variants, will hit those living in London and the South East particularly hard due to high property values in these locations.

On a more positive note, moves to increase the estate value threshold below which no fee is payable from £5,000 to £50,000 have survived the review intact and will lift approximately 25,000 estates annually out of fees altogether.

Despite the introduction of the transferable Nil Rate Band in October 2007 and the facility to pass your pension fund to successive generations outside of your taxable estate on death in 2015, Inheritance Tax (IHT) receipts have continued to rise year on year since 2009 by, on average, 12% each year. The rate of increase between 2014-15 and 2015-16 was a staggering 22%, when IHT receipts totalled £4,673 million**.

The need to take expert advice on inheritance and estate planning to reduce the tax burden for your beneficiaries has never been greater.

If you would like more information on the steps that you can take, please contact us on 0800 321 3581 or download our guide on Inheritance Tax, Wealth Management and succession planning ‘Securing your wealth for future generations’.

⇨ Download Securing your wealth for future generations

*source https://www.gov.uk/performance\moj-probate-applications

**source https://www.gov.uk/government/statistics/inheritance-tax-statistics-commentary

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