Probate price hike could cause real hardship
Sir, I am deeply troubled and saddened that the Government is ignoring responses to its recent consultation by pressing ahead with massive rises to the cost of obtaining a grant of probate from May this year.
The current fee is £155 if a solicitor makes the application. For estates worth over £300,000 the fee will rise to £1,000. The fee will rise to £4,000 for estates between £500,000 and £1 million, £8,000 for estates worth more than £1m and up to £1.6m and £12,000 for estates worth more than £1.6m and up to £2m. For estates worth over £2m the fees will be £20,000. The fee will nearly double even for the most modest estates worth between £50,000 and £300,000.
The fees will apply irrespective of who inherits the estate, unlike inheritance tax, so widows and charities will pay under the new regime as well as farmers and small business owners.
For many elderly people, their house is the only main asset; they are going to find it impossible to re-mortgage or may have to undertake equity release just to get probate, this will be the situation in many cases where probate is only required to close, for example, an ISA that was held in husband’s sole name and everything else was jointly held. How, in the real world, can a vulnerable surviving spouse fund these costs? The increase will have a large impact on the many farmers in the area, who may have valuable land but have low income and little cash.
Like inheritance tax, it will need paying upfront; the Government mentions the fact that executors or beneficiaries may have to lend the estate the money necessary to pay the fees. This is commonly the case now, but of course lending £155 is totally different to lending £4,000 or £20,000.
I believe this will result in real hardship and distress to many in the local area.
Of course, such hardship could be avoided if the Government simply applied a modest rise to probate fees sufficient to offset the actual costs of the Probate Registry, if that is actually necessary. Impending fee increases constitute, in reality, additional inheritance tax aimed directly at those who can least afford it.
There are already unscrupulous companies that seek to cash in on people’s concerns by promising schemes to “protect” family wealth. Sadly, these often lead people into ill-advised and costly arrangements with regards to their assets and estate planning, such as the inappropriate use of trusts and giving away property. I would urge people to take full advice from a local, appropriately qualified solicitor before making any changes to the way they own their property and assets. Yours etc,
(Solicitor and director, Scott Duff & Co Solicitors)