The so called ‘Death Tax’ rears it’s ugly head again as the subject of probate reform is being reviewed once more, after HUGE resistance last time around…
See the following article from the Mirror to learn more about these proposed changes and what it could mean for you.
Thousands of bereaved families face a jump in fees payable after the death of a relative. The maximum charge for a grant of probate will be £6,000 under a new sliding scale.
However, the increase will be less dramatic than the Government’s original proposals to introduce fees of up to £20,000.
Obtaining a grant of probate is the process by which someone is given the authority to deal with the property, money and possessions of someone after they die. It is usually sought by the executor of a will or a person acting on their behalf. Around half of deaths lead to an application for a grant of probate in England and Wales.
Under the existing system, there is a flat probate fee of £215 for individuals and £155 for applications made through a solicitor. Estates valued at under £5,000 are exempt.
Ministers unveiled plans to overhaul the approach in 2016, but the proposed reforms – condemned as a “stealth death tax” by critics – were ditched ahead of the General Election last year. On Monday, the Government laid legislation to introduce a new “banded” structure for probate fees.
The new plans for probate
Under the plans, all estates valued at less than £50,000 will be exempt from probate fees. The Ministry of Justice said this would take an additional 25,000 estates a year out of the requirement to pay the fees.
But for estates that are not exempt, the costs will be higher.
The new system will be banded according to the value of estates, before inheritance tax.
Fees will start at £250 for estates valued at £50,000-£300,000, rising incrementally. The highest fee is set at £6,000 for estates worth more than £2 million.
Justice minister Lucy Frazer said: “Our system will see thousands of bereaved families paying no probate fees at all – protecting 25,000 estates each year.
“We have listened closely to concerns around early proposals. Fees will never be more than 0.5% of the estate’s value, and are recoverable from the estate.
“Fees will be set at a level to ensure that they will only be paid by those who can afford them, with all income going directly to our courts and tribunals – ensuring justice is done, and protecting victims and vulnerable people.”
Source – Hayden Smith | Mirror
Read the original, full article here
Some additional insight from our friends at STEP
The new charges bear no relation to the cost of probate, and are simply another form of taxation, sneaked in through the back door.
The government has failed to explain why it is choosing to place this burden on bereaved families, many of whom will have spent months or years paying expensive care fees for their elderly relatives. It is this group which has been singled out to shoulder the cost of the courts service via this additional tax, to be paid on top of IHT and legal expenses.
The government still plans to try and introduce this measure without any proper debate via statutory instrument. STEP has obtained a legal opinion which confirms that, given the tax nature of this measure, this is an abuse of the parliamentary process, a view shared by the House of Commons Joint Committee on Statutory Instruments.
Read the full article from STEP here