Critics claimed the planned increase was a backdoor stealth tax on grieving families that could have cost the largest estates £6,000.
The government has decided to scrap the controversial probate fee hike introduced by Theresa May.
Probate fees were set to go up next year, potentially hitting 300,000 bereaved families a year.
Under the new system, the charge would have gone up according to the value of the estate.
The changes would have seen the flat fee of £215 a year rise to £6,000 for the largest estates - raising around £155 million a year for the government.
The government will now review probate fees as part of the annual assessment of the fees charged for proceedings in the civil and family courts.
A Ministry of Justice spokesperson says: “Fees are necessary to properly fund our world-leading courts system, but we have listened carefully to concerns around changes to those charged for probate and will look at them again as part of a wider review to make sure all fees are fair and proportionate.”
Jon Greer, head of retirement policy at Quilter, says: “A hike in probate fees has been on the cards for numerous months now, but just this weekend the justice secretary scrapped the controversial plan.
“The dispute was primarily because the tiered charge structure resembled a tax, rather than a fee.
“Even the Office for National Statistics said that it expected to treat the charges as a tax in its evaluation of the UK’s finances. Scrapping the hike in favour of a review was an easy win that was hard to miss.”
Probate fees give legal control to the family over the estate of someone when they pass away.
Currently, a flat fee of £215 applies in England and Wales - or £155 if you use a solicitor – on estates above £5,000.
Critics argued that the hike was a backdoor stealth tax that would hurt grieving families.
Under the original plan, the threshold for paying fees was set to be lifted to £50,000, exempting 25,000 estates annually from fees.
Estates valued between £50,000 to £300,000 would be charged £250, going up to a maximum £6,000 for estates more than £2 million.
Kay Ingram, director of public policy at LEBC, says: “I am delighted as we campaigned against this increase which looked more like a tax than a fee.
“We understand the courts have to be paid for but lumping that cost on bereaved families was an unfair burden and we are pleased that the government have listened.”
- This article was first written by our sister magazine Moneywise.