The cost of administering a deceased person's estate will substantially increase from May. In England and Wales, probate is the process of applying for the right to deal with a deceased person's property, money and other possessions - known as their 'estate'.
If a person has left a will, they usually appoint a will executor. This executor then has to apply for a 'grant of probate' from the probate registry. Currently a flat fee of £215 applies on all estates (or £155 if the application is made by a solicitor).
However, from 1 May this year, the cost will be linked to the size of the estate. There will be no fees on estates worth less than £50,000 but those in the £50,000 and £300,000 bracket can expect to see costs rise to £300.
Fees however soar for those dying with greater estates. People with estates between £300,000 and £500,000 will see fees increase to £1,000, while people with between £500,000 and £1 million will be forced to pay £4,000.
THE NEW INHERITANCE TAX
Where estates are worth between £1 million and £1.6 million the fee will be £8,000, or £12,000 for those worth between £1.6 million and £2 million. Fees peak on estates over £2 million where a £20,000 charge will be applied.
The increases mean that if you are administering an estate currently and it is worth more than £50,000, it's important to get your application for probate in before the fees increase.
At this stage it is unclear whether the rules will affect applications submitted after 30 April 2017, or those that died after this date.
Duncan Bailey, partner and head of private client at law firm Brabners, called the hike a new inheritance tax.
He says: 'Despite 95 per cent of respondents disagreeing with the initial proposals, the government is set to push ahead with its increase in probate fees. This represents a huge financial increase for those dealing with bereavement.
'As the assets of a will are not released until probate has been granted, for many the changes will also spark a need for financial assistance - adding further administrative burdens to people who are going through a period of distress.
'This is a sensitive matter that needs to be dealt with accordingly and changes that essentially amount to a "new inheritance tax" are currently going under the radar.
'The government must provide further clarity on the changes, particularly in relation to the implementation date, and we would urge those considering an application for probate to do so as soon as possible to avoid being hit by the new fees.'
This article was written for our sister website Moneywise.
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