Good news as government scraps ‘death tax’ hike
“In this world,” once wrote Benjamin Franklin, “nothing can be said to be certain, except death and taxes.”
He wasn’t far wrong. And until recently, the government was planning to make dying rather more expensive for some of us.
It was going to do it by changing the way it charges for ‘probate’ – applying for the legal right to deal with someone’s estate after they die. If the person left a will, you apply for a ‘grant of probate’. If they didn’t, you apply for a ‘grant of letters of administration’.
At the moment, there’s a flat fee of £215 to do either. Under the recently scrapped plans, this would have been replaced by a sliding scale.
Estates worth under £50,000 would have attracted no fees. Those valued between that sum and £300,000 would be charged £250. A maximum fee of £6,000 would have been applied to estates worth over £2 million – a 3,770% rise!
The new charges were supposed to have been introduced in April 2019, but thanks to Brexit there was no time to debate them in parliament.
Are the fee hikes gone for good?
So, what happens next? At the moment, the current flat-fee system will remain in place. This means you’ll pay £215, regardless of an estate’s value.
That’s not to say the system won’t change in the future. According to the Financial Times, a Ministry of Justice spokesman has said that the department will look at fees again “as part of a wider review to make sure all fees are fair and proportionate.”
We can’t predict when that will be, but we recommend you keep an eye out for future changes. If new fee proposals are issued, then you may find yourself in a position which makes it cheaper to apply for probate sooner rather than later.
While you’re at it, it’s also a good idea to get up to speed with the rules that apply to Inheritance Tax (IHT). You can read our posts on Inheritance Tax here and find out about our IHT planning service on this page. For more help contact us here at THP with offices in Chelmsford, Cheam, Wanstead, Saffron Walden and London City.