An expected revision of the probate fees structure for England and Wales set for 1 April has been delayed.
The proposed changes will increase the cost of probate from the current single, flat charge of £215 to a minimum of £250. A new fee structure based on the size of estate being administered will rise through six bands to a maximum of £6,000. The probate fee threshold will rise from £5,000 to £50,000. Over half of estates will pay no probate under the higher threshold and more than 25,000 more estates a year will be exempt.
By classifying the increases as a fee rather than a tax, the government was able to put the changes forward as a statutory instrument or secondary legislation, rather than primary legislation which requires greater parliamentary scrutiny.
Citing pressures on parliamentary time from the ongoing Brexit crisis, the Ministry of Justice announced that the statutory instrument has yet to be approved. Once this happens, the new regime will come into effect 21 days later. While such instruments are normally passed without debate, MPs can raise objections and force a vote on an issue, leading to amendments and further delay. The Labour party has already objected to the probate proposals and as yet there is no new timetable.
The confusion on the timing of the changes has created a log jam with HMRC as people tried to beat the original 1 April deadline and apply for probate. HMRC must process inheritance tax (IHT) registration forms before probate can begin This has led to HMRC taking a more flexible stance on registering an estate for IHT purposes. It has said the process will be more flexible for the time being on IHT registration so that people can wait to submit IHT forms before starting the probate application.
Individuals who may be asked to be executors should think carefully about the terms of any executorship once the new fee structure is in place. Bank accounts can be frozen while probate is being processed, so they could be asked to help fund probate fees if a loan is not secured. Under the new regime, these could be substantial.
If you are unsure how this could affect you please contact our Wills & Probate department on 0114 266 4432 or info@smhca.co.uk.
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