Press Releases

News and Events

Probate fees on the rise warns Midlands tax lawyer

  • Posted

A proposed huge increase in court fees leaving relatives inheriting estates with potentially thousands of pounds worth of bills is of ‘major concern’, a leading Midlands lawyer has said.

Gary Priest, a partner at law firm mfg Solicitors, has called on the Government to drop its proposals for probate court fees, which would scrap the fixed fee of either £150 or £215 in favour of a controversial sliding scale.

Tax specialist Mr Priest has suggested that the Ministry of Justice is creating “a new form of Inheritance Tax by another name”.

While those inheriting less than £50,000 will not pay anything, the Whitehall-led consultation plans for fees will rise sharply from £300 up to £20,000 depending on the value of the estate.

Under the proposed system any estate worth between £50,000 and £300,000 would incur a probate court fee of £300, rising to £1,000 for estates worth up to £500,000 and then £4,000 for estates up to £1m. The sliding scale rises to £20,000 for estates worth over £2m.

The costs would rise even though the amount of work for the Probate Registry is the same, Mr Priest said.

A consultation on the proposals closed on 1 April but Mr Priest says the Ministry of Justice should think again – warning that inheritors will face cash flow problems because the fees would have to be paid up front.

Mr Priest said: “The level of work involved for the Probate Registry is the same whether the estate is worth £20,000 or £2 million. It is outrageous to charge more for larger estates. It is nothing more than a new inheritance tax by another name.

“While removing lower value estates from the required fee sounds fair, the level of increase for the larger estates cannot be justified.

“I suspect that if this is implemented, it will simply lead people to transfer more valuable properties into joint names with their children to avoid the probate process altogether. This can have nasty unforeseen consequences such as compromising the financial security of the parent or an increase in capital gains tax when the property is sold. The Ministry of Justice needs to think again.”

The Government has defended the proposals saying estates will benefit from an increased nil-rate Inheritance Tax band on homes. There has been no indication as to when the charges would be introduced.