Probate charges set to spiral
For all Estates with a value of over £5,000 probate charges have been set at a flat rate of £215. However, this may soon be a thing of the past. Government plans announced last week could see the introduction of a banded system of probate charges set according to estate value. Meaning that the wealthiest estates will attract a maximum bill of a staggering £20,000. That’s an eye watering 920% increase.
How do the new Probate charges breakdown?
It’s a bit of a good news bad news situation. Under the proposed changes the threshold for probate charges rises to £50,000 before an estate will incur any fees – meaning an extra 30,000 people will be exempt from paying probate charges. Great. However, the sharp rise in property prices across the country, means that thousands of people will find themselves in the £1,000 fee bracket. And, that’s before we even look at inheritance tax. Which is not such great news.
In fact, the revenue that the new banded probate charges are projected to raise is so significant that Ministers predict it will gain an extra £250million a year for the taxpayer. Justice Minister Shailesh Vara, says these additional monies will be a ‘critical contribution to cutting the deficit and reducing the burden on the taxpayer of running the courts and tribunals’.
- Estates worth over £50k and up to £300k = £300 fee
- Estates over £300k up to £500k = £1,000 fee
- Estates over £500k up to £1mil = £4,000 fee
- Estates over £1mil to £1.6mil = £8,000 fee
- Estates over £1.6mil to £2mil = £12,000 fee
- Capped at £20,000 fee for estates in excess of £2mil
As the difference in the amount of work required for a high value or low value estate is neglibiable many feel that this massive hike in probate charges is just another tax on the wealthy, leaving many people wondering how they can avoid paying it all together…
Here at Future Legal Services we can offer you comprehensive inheritance tax planning advice, including the use of trusts to protect your assets and full probate support services for your executors. If you are yet to make your Will please contact us today to discuss your requirements – 01322 664885.
Source: Financial Times