Massive Increases in Probate Charges on Large Estates on the Way
Probate fees, which rose sharply only three years ago, are about to rise again.
Under the present scheme an application for probate by an individual costs £215 and by a solicitor £155, but from May 2017 a new tariff is being introduced which will see the probate fee for estates of more than £2 million rise to £20,000 or more.
The new scheme has been decided upon by the Government after a 2016 consultation produced a majority of more than 90 per cent against the proposal to link the cost of probate to the value of the estate.
It should be noted that the value on which the charges will be levied is the gross value of the estate, not the value for Inheritance Tax (IHT) purposes, so assets which benefit from IHT reliefs (such as farmland or business assets) will be fully valued when calculating the amount of probate fee to be charged.
On the plus side, those with smaller estates will benefit from the estate value below which no probate fee is charged rising from £5,000 to £50,000. The proposals are expected to remove 30,000 estates annually from the charge for probate, but to raise an additional £250 million overall.
Under the new proposals, the fees will be as follows:
- £300 for estates valued at £50,001 to £300,000;
- £1,000 for estates valued at £300,001 to £500,000;
- £4,000 for estates valued at £500,001 to £1 million;
- £8,000 for estates valued at £1,000,001 to 1.6 million;
- £20,000 for estates valued at £1,600,001 to £2 million.
- Estate more than £2 million will incur a fee of 0.4 per cent of the value of the estate.
If your estate is large, not only will the IHT charge be likely to be significant, but the probate fee may be also.
To discuss how to make sure as much of your estate as possible goes to those you would like to benefit from it, contact us.