… or more accurately, it now costs more to die if you live in England and Wales as Probate fees are set to rise in May 2017.
The Ministry of Justice (MoJ) has announced that it plans to go ahead with a revision of probate fees despite a consultation in which only 63 out of 829 respondents agreed with changing from a flat probate fee to a proportionate fee based on the value of the estate. In addition only 13 out of 831 respondents agreed with the revised proportionate scales.
The MoJ expects this move to generate around £300m in additional income per year – which will be a substantial contribution to the running costs of Her Majesties Courts & Tribunal Service (HMCTS).
The old and new fees, along with the expected proportion of estates affected in England and Wales) are shown in the table below:
|Value of Estate||Current Fee (until May 2017)||New Fee (from May 2017||Proportion of Estates affected|
|Up to £5,000||Nil||Nil||58%|
|£5,000 to £50,000||£215||Nil|
|£50,000 to £300,000||£215||£300||23%|
|£300,000 to £500,000||£215||£1,000||11%|
|£500,000 to £1,000,000||£215||£4,000||6%|
|£1,000,000 to £1,600,000||£215||£8,000||1%|
|£1,600,000 to £2,000,000||£215||£12,000||0.3%|
* The current fee of £215 is for personal applications. Applications made by a Solicitor have a reduced fee of £155.
It is important to ensure that funds are available to your executors to pay the fees. This can be easier said than done, particularly as the fees must be paid before any assets can be distributed; this is something we would be likely to incorporate into our client’s financial plan and discuss with them at the next meeting.
As you can see, there really is a case for spending your money and enjoying yourself … and as a result saving Inheritance tax on your estate and Probate fees as well.