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A BANDED system for probate court fees is paramount to “a tax on the bereaved” according to leading law firm Roythornes.
Elizabeth Young, head of private client at Roythornes, said: “The increases have been agreed to assist in the funding of court services, but this is such an enormous change of direction that it’s going to be extremely difficult for the public to swallow. Furthermore, many will know nothing about these charges until someone close to them dies.”
Despite strong objections from both the public and professionals during the consultation process, the government confirmed the introduction of a banded system for applications for grants of probate based on the value of an estate. Within the highest band, estates valued over £2million will pay £20,000 in fees.
Elizabeth continued: “The news of this increase has come as a great surprise to the law community; 831 people responded to the question of whether they agreed to the proposal during consultation with 810 objecting. It’s disappointing that this 97.5% majority wasn’t compelling enough to encourage modifications of the original proposal.
“The changes represent an increase of around 13,200% for the highest property value band. This is particularly concerning for our client base as a firm that has strong ties with land and rural estate owners.”
The government response*, issued on 24 February 2017, confirms that in addition to the fee structure, there will be an increase in the threshold below which no fee is payable from £5,000 to £50,000 while removing these applications from general fee remissions.
Arguments against the changes asserted that a fee should be set according to the cost of providing the service, especially as the level of administration, and therefore the cost to the Probate Service, remains the same regardless of the estate value.
In opposition, the Senior Judiciary concluded that the existing flat fee system had been a regressive step, while the new fee structure would ease the disproportionate cost burden of a grant of probate application on lower value estates.
Elizabeth concluded: “The concern now is the likely pressure on the elderly to put assets into joint names in an attempt to avoid probate, which in turn leads to a loss for the government. We will certainly be alerting our clients to the added benefit of forward planning to avoid this fee so it’s really questionable how much the government and court system will benefit.
“Alternatively, it’s suggested that solicitors will be left to cover the fee – this might happen if the firm feels charitable, but most would potentially only do this on a commercial lending basis which will have implications around law firms acting as lenders. Otherwise, people will no doubt have to go to the banks who will apply their own charge.”
The changes are expected to be implemented by May 2017.
Further information about Roythornes can be found at www.roythornes.co.uk