Flat Rate Probate Fees Switch to Sliding Scale

Probate

The government is to go ahead with plans to move from the current flat rate fee for applications for a Grant of Probate to a banded structure, where the fees increase in line with the value of the estate.

The Government have ignored most of the responses to the consultation and decided to implement the proposals regardless. Only 63 of the 829 responses to the proposals were in favour of moving to an estate value based fee system, which begs the question of why bother with the consultation in the first place!
The new fees are to be effective from May 2017 and the table below shows the new fees:-

Estate value New Fee
0 – £50,000 £0
£50,001 to £300,000 £300
£300,001 to £500,000 £1,000
£500,001 to £1m £4,000
£1m to £1.6m £8,000
£1.6m to £2m £12,000
Above £2m £20,000

Currently, a £215 flat fee applies if probate is applied for by friends or family, which accounts for 40% of applications, or £155 if a solicitor or accountant completes the process. So, for all but the smallest of estates, there is a significant increase in fees.

The existing fees reflect average administration costs and currently generate around £45million per annum in income for HM Court and Tribunal Service (HMCTS). The Ministry of Justice by its own admission expects the new regime will generate over £320million for the courts system. Some would argue this is therefore a form of taxation rather than a contribution to court costs!
In addition, under the new measures, probate fees will be removed from the general fee remissions scheme (‘help with fees’) but provision will remain for exceptional fee remissions to be granted at the discretion of the Lord Chancellor, in particular, where the executor shows that they have exhausted all reasonable means of funding the grant of probate application.

The new regime is likely to involve more work for executors as the fees need to be paid before the Grant is issued to enable access to estate funds. This may even involve executors having to source finance to meet the cost of the probate application. The Probate Service will be able, via a limited grant of probate, to provide some access for executors to the assets of the estate, for the sole purpose of paying the necessary fees. How this will work in practice remains to be seen as it requires the agreement of the banks or other financial institutions, so in practice may not work as it should.

For more information on our Probate and Estate Administration services, me at paul@raffingers.co.uk