Business

Jump in death fees for large estates

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Large rises in fees payable after death that will affect millions of people in England and Wales have been confirmed by the government.

The Ministry of Justice will raise probate fees in May to as much as £20,000 for those with the biggest estates.

At the moment such fees are fixed at either £155 or £215.

Some in the industry have criticised the plans, designed to raise money for the court services.

Fee levels

Grant of probate gives executors the right to distribute the proceeds of someone's will.

Under the new rules, most people - including the less wealthy - will pay less.

Currently the fee is chargeable on any estate worth more than £5,000. This threshold will rise to £50,000, meaning that 57% of estates will pay nothing.

However, anyone with an estate worth more than £50,000 will pay considerably more.

Those worth between £50,000 and £300,000 will pay £300, with fees rising to a maximum of £20,000 for estate worth more than £2m.

New probate fees
Value of estate Planned fee
Less than £50,000 £0
£50,000 to £300,000 £300
£300,000 to £500,000 £1000
£500,000 to £1m £4,000
£1m to £1.6m £8,000
£1.6m to £2m £12,000
Above £2m £20,000

A Ministry of Justice spokeswoman said: "We are introducing a fairer banded system of probate fees which will mean more than half of estates will pay nothing and 92% will pay no more than £1,000.

"Fees are necessary to maintain an accessible, world-leading justice system which puts the needs of victims and vulnerable people first."

The plans were confirmed following a consultation period, but have been criticised by some financial advisers.

Gordon Andrews, financial planning expert at Old Mutual Wealth, said: "It is disappointing the Government plans to press ahead with the new fee structure despite wide-scale concern from the industry.

"The move from a flat rate fee structure to one which is tiered based on assets could, in theory, have been an acceptable model, but the level of fees imposed are arguably unjustified.

"At its crudest, one could argue that this is yet another stealth tax being levied by the government, which can add up to 1% in fees on the value of an estate."

Alison Morris, partner at Wilsons, said: "HM Revenue and Customs is already seeing record levels of inheritance tax receipts, and these fee hikes are yet another stealth tax on the wealthy families.

"It is more than likely we will see a rush to the probate registries for grants to be issued in April before the new fees come into effect, which could cause delays issuing grants."

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