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Press comment: MoJ presses on with tiered probate fee

05/11/2018

This evening the Ministry of Justice announced they are continuing to pursue a banded structure for probate fees. While they’ve ensured fees will never be more than 0.5% of the value of the estate a £500k estate will pay over 10 times more at £2,500, while an estate over £2m could pay up to 3,771% more.

 

Rachael GriffinRachael Griffin, tax and financial planning expert at Quilter comments:

“The probate fee fiasco of last year has started to fade from public memory. After keeping tightly lipped they have now revealed they are pressing ahead with a tiered structure. While the detail of the charges are yet to be revealed, the change will still mean a heftier sum for those with larger estates. The replacement of the flat rate probate fee of £215 (or £155 if using a solicitor) will likely mean people with large estates will face extortionate fees and with property values at historically high levels the number of estates falling into a top band are likely to be quite high.

“Their announcement includes reassurance that the money raised will be spent on running the courts and tribunal service. However, that still means that people, particularly those at the top end, will be paying disproportionately for the administrative work involving probate. So  despite the reassurances  it’s hard not to see this as a stealth tax on those who already pay inheritance tax. Easing the burden on lower estates and lifting 25,000 annually out of probate is admirable, but it still means for others they will face a steep fee during an emotional and challenging time.

“These 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.”

For more information contact

Kathleen Gallagher023 8072 629307990 004932kathleen.gallagher@quilter.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.7 billion in investments (as at 30 September 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

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  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

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