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What will proposed changes in probate fees mean?

 In Business

Probate fees could soar to up to £20,000 for the highest-value estates under new proposals announced by the Ministry of Justice. This fee would be almost 130 times the current level.

Currently, the probate application fee is a flat rate of £215. There is no fee for estates worth under £5,000. Under the new proposals, the exemption threshold would be £50,000. The Ministry of Justice claimed this would lift 30,000 estates out of paying probate fees altogether. There would then be a “slab-based” tax, starting at £300, for estates worth between £50,000 and £300,000. This represents a rise of 28% for many estates.

The fee would rise to £1,000 for estates worth more than £300,000 and less than £500,000. For estates worth between £500,000 and £1m, the new fee would be £4,000, and for those worth between £1m and £1.6m, it would rise to £8,000. Those valued at between £1.6m and £2m will pay £12,000, and the most valuable estates, worth more than £2 million, would be charged £20,000.

The Ministry of Justice claimed that the changes were necessary to help reduce the deficit and also to reduce the £1.1bn burden on taxpayers used to cover the cost of funding the courts and tribunals system.

Justice minister Shailesh Vara said: “These proposals are progressive, with lower value estates lifted out of paying any fee at all and other estates only paying more as the value of estate increases. They are also necessary, making a significant contribution to reducing the deficit and enabling investment which will transform the courts and tribunals service.” He also noted that the highest rate would only affect the very wealthiest estates, while 94% of the estates would only incur a rate of £1,000 or less.

Many have criticised the proposals, however, seeing them as additional burdens imposed on people already dealing with bereavement. With property values continuing to rise, more estates are likely to fall into higher-value bands, but those seeking probate may be cash-poor. The tiered format also means that fees can jump suddenly. An estate with a value of £500,001, for example, would pay £4,000, while one worth £499,999 would only pay £1,000.

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