Those with assets of over £1m will have to pay probate fees of between £8,000 and £20,000. With the rise in house prices, this could impact a growing number of people.
It is questionable whether the size of someone’s estate determines the amount of work required by the courts. So simply creating a fee structure based on estate value will doubtlessly create a system where higher value cases fund the probate service for low value cases.
People will need to consider how beneficiaries access the required funds to pay the probate fee, as until the probate fee is paid, the assets cannot be released, although some measures to help people access cash from the estate are being considered.
Gordon Andrews, financial planning expert, Old Mutual Wealth, comments :
“It is disappointing the Government plans to press ahead with the new fee structure for Grants of Probates despite wide-scale concern from the industry. The move from a flat rate fee structure to one which is tiered based on assets could, in theory, have been an acceptable model, but the level of fees imposed are arguably unjustified.
“At its crudest, one could argue that this is yet another stealth tax being levied by the Government, which can add up to 1% in fees on the value of an estate.
“These proposed changes will add further complexity to estate planning. Using trusts can help reduce the value of an estate for inheritance tax purposes, meaning a lower charge will apply. People 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.”