Probate is the legal process whereby a will is “proved” in a court and accepted as a valid public document that is the true last testament of the deceased.
In February, the Ministry of Justice confirmed that the rise in probate fees will be introduced from May 2017, proposing an overhaul of the current flat rate fee of £215 (or £155 if using a solicitor) to one that is tiered based on assets.
The change will mean lower value estates are exempt from any charge, but the charge on estates which exceed £50,000 (€58,386, $62,304) will increase quite dramatically.
Those with assets of over £1m will have to pay probate fees of between £8,000 and £20,000.
The controversial move attracted criticism, with many labelling it a ‘death tax’.
However, the policy could be delayed as according to British newspaper The Times, a group of UK MPs said the changes have “all the hallmarks of taxes rather than fees” and therefore would be subject to the rule that all tax changes must go through parliament.
‘Stealth tax’
Rachael Griffin, financial planning expert at Old Mutual Wealth said it is unsurprising that the government is coming under pressure about the new probate fee structure, describing it as a “stealth tax”.
“When the plans were announced the industry raised concerns that the fee hike for some would be extortionate.
“A system where over 90% pay less than £1,000 would be a positive move. However, it adds more uncertainty to estate planning as more changes could be coming down the pipeline.
“People who are concerned about how beneficiaries will pay the probate fees could leave sufficient funds in a life insurance policy, and provided the policy is written in trust, it can be accessed immediately on death, without the need for probate,” she said.
