A 9000% rise in probate fees, coming into effect from 1 May 2017, could cause a financial and administrative headache for people with assets of more than £50,000, and a rush for demand in estate planning advice.
The existing flat fee of £155 if sourced through a solicitor and £215 if sourced privately to obtain a grant of probate – essential before administering a deceased person’s assets as outlined in their will – is to be replaced by a sliding scale that starts at a £300 fee for an estate worth £50,001-£300,000, rising to a £20,000 fee for estates worth over £2m.
Ellie Holland, partner and probate and tax planning specialist at The Wilkes Partnership, comments:
“It’s often said that the only certainties in life are death and taxes. This rise in the so-called ‘fees’ to administer probate is a tax on death by another name, and won’t just affect the wealthy. This is on top of the existing Inheritance Tax for larger estates, and will even affect estates that aren’t subject to Inheritance Tax, meaning that people who wouldn’t have previously expected to plan their estate should now strongly consider it to ensure their beneficiaries don’t lose out.
“The one positive note from the changes is that estates worth between £5,000 and £50,000 will now be exempt from probate fees. However, with the typical house in the West Midlands worth £181,000, this benefit is unlikely to be felt in any estates where property is involved.”
The Wilkes Partnership recommends that people whose estate is likely to be worth more than £50,000 seek legal advice on estate planning, as legitimate planning methods such as trusts can help reduce the value of someone’s estate prior to death.
Ellie adds: “For those who are just about to start administering a recently deceased person’s estate, if a grant of probate has not yet been obtained we would urge you to work with your solicitors to ensure this is completed as soon as possible to avoid the risk of being stung with higher fees.”
If you would like more information about estate planning and wills please contact Ellie Holland at The Wilkes Partnership [email protected] / 0121 733 8000.