Changes to the probate rules –there’s good news and bad

In a move that has been referred to as the government’s way of introducing a ‘stealth tax’, wealthy families are set to face probate charges of up to £6,000 from this April. Ministers have been accused of sleight of hand by referring to the amount payable as a ‘fee’, thus avoiding full parliamentary involvement in the decision.

 

How will the new fees operate?

Currently, when a Solicitor applies for probate on behalf of an Executor, there is a flat fee payable of £155. However, when the new fee structure is introduced in April it will be on a sliding scale based on the value of the estate. Where an estate is valued at over £2m, the charge will be £6,000, a huge increase over the current amount payable. However, it could have been much worse; this figure represents a 70% reduction on the £20,000 fee set out in the government’s original proposals. At the other end of the scale, estates valued at less than £50,000 will be exempt from the new fees.

Estates worth between £1.6m and £2m will be charged a fee of £5,000, and those between £1m and £1.6m will pay £4,000. Forecasts show that the Ministry of Justice is likely to raise an extra £185m by 2022-23 under the new system. Critics have called the new regime double taxation by another name, pointing out that larger estates are also likely to be paying Inheritance Tax at 40%.

Commenting on the changes, Justice Minister Lucy Frazer had this to say: “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.”
 

Digital technology reshapes the probate system

Obtaining a Grant of Probate in an estate can seem a rather antiquated process. In a move designed to propel the probate system out of the Dickensian era and into the digital age, applying for probate will involve making a ‘digital statement of truth’ rather than swearing a traditional oath on a bible in person at a Solicitor’s office or a probate registry. The digital statement of truth is a declaration by the person applying for probate that the information provided is true at the time of submission. Solicitors will assist in preparing the paperwork on behalf of the Executor in the same way as they do now, however the signing of the statement looks set to be completed electronically using the Gov.UK Verify service, under which third parties authenticate an individual’s online identity.

Although not a fully digital service initially, the new procedures should help modernise and streamline the current system to an extent. Other changes include the introduction of more plain English in the paperwork and less legalese, making it easier for clients to understand the documents prepared for them by Solicitors.