Probate fee hike slammed as an 'abuse of power'

Although the Ministry of Justice (MOJ) has stated that estates will never pay more than 0.5% of their estate, the new charges will see costs soar for those with larger estates.

Plans by the Ministry of Justice (MoJ) to increase probate fees for bereaved families from next April is an abuse of the government's constitutional power says the Institute of Chartered Accountants in England and Wales (ICAEW).

The Ministry of Justice confirmed controversial plans to change the flat probate fee structure to one based on the size of estate earlier this month.

But the ICAEW has excoriated the MoJ for what it sees as an abuse of constitutional powers in changing probate fees.

The ICAEW says that changing probate fees by statutory instrument and not through the government’s Finance Bill, for which the Treasury is ultimately responsible, causes a “lack of transparency and accountability”.

Jane Berney, ICAEW business law manager, explains why the ICAEW believes the MoJ is overextending its power: “When MoJ first consulted on these changes in 2016, 97% of respondents were against them, yet the department is still going ahead. Moreover, the parliamentary Joint Committee on Statutory Instruments (SI), made up of MPs and peers, reviewed the proposals and concluded they were unlawful.

“It said pushing through the increases by SI was beyond the powers of the Lord Chancellor, as the increase was equivalent to putting a new tax in place as the fees were disproportionate to the service provided.

“Probate will become largely automated, not quite as simple as paying for your car tax but nevertheless all online, and currently costs £40 million to run. This drastic increase in fees is expected to raise £150m to pay for running the MoJ. As the new fees are effectively a tax on wealth, they should be subject to the right scrutiny, like any other tax.

“The possibilities available through automation for probate are ideal to make this a far less arduous task for the executor, but question needs to be asked as to whether the MoJ is abusing its constitutional powers.

“There is no doubt that there is a need for investment, but this is effectively a tax on wealth, and should be treated as such. The probate offices will need to gear themselves up for an influx of applications in advance of the planned increases as executors rush through the process to try and beat the price hike.”

In response an MoJ spokesperson says: “Our system will see thousands of bereaved families paying no probate fees at all – protecting an additional 25,000 estates each year.

“Fees are vital to the effective running of our courts and tribunals, ensuring access to justice and protecting vulnerable victims.

“Parliament gave us the power to set these proposed fees, and they will be fully scrutinised and debated by both Houses.”

Probate fee changes explained

Currently a flat fee of £215 applies in England and Wales (£155 if you use a solicitor). The new charges will be linked to the size of the estate and will be as follows:

Size of estate

Probate charge

Better or worse off?* 

Up to £50,000

No charge

Will save £215

£50,000- £300,000

£250

Rise of £35

£300,000- £500,000

£750

Rise of £535

£500,000 to £1m

£2,500

Rise of £2,285

£1m to £1.6m

£4,000

Rise of £3,785

£1.6m- £2m

£5,000

Rise of £4,785

Above £2m

£6,000

Rise of £5,785

*Compared to current system. Source: MOJ

- This article was originally written by our sister publication Moneywise.

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