Plans to raise probate fees scrapped by Government
Unpopular plans to raise probate fees have been scrapped by the Government ahead of the snap General Election.
Plans to increase probate fees have been scrapped by the Government.
With the snap General Election announced earlier this week due to take place in June, the Ministry of Justice announced there was no longer sufficient time to run the legislation through parliament.
It's up to the next Government to decide whether they want to bring the plans back – and there's no guarantee that they will, even if the Conservatives are re-elected.
Currently a fixed fee of either £155 (if applied for by a solicitor) or £215 (if applied for by an individual) is paid to the courts in order to grant probate, so executors can distribute the proceeds of someone’s will.
The fee is only paid if an estate is worth more than £5,000.
How it would've worked
Had plans gone ahead, fees would've been set on a sliding scale, as detailed below.
|
Value of estate |
Proposed fee |
|
Up to £50,000 |
£0 |
|
Over £50,000 up to £300,000 |
£300 |
|
Over £300,000 up to £500,000 |
£1,000 |
|
Over £500,000 up to £1 million |
£4,000 |
|
Over £1 million up to £1.6 million |
£8,000 |
|
Over £1.6 million up to £2 million |
£12,000 |
|
Over £2 million |
£20,000 |
The threshold for the fee would have risen to £50,000, meaning millions of people wouldn't have been paying anything at all – an estimated 58% of estates would not have been liable for a probate charge thanks to the change.
However, the estates that paid a probate fee would have forked out substantially more, from £300 for estates worth £50,000 to £300,000 and up to £20,000 for estates worth more than £2 million.
The proposed hike was strongly criticised by financial advisers, describing it as a stealth tax on the rich.
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What other Bills might be scrapped?
So far, this is the only plan to be scrapped by the Government in the run-up to the unexpected General Election.
However, it may be that other complicated financial legislation is put on ice until a more stable Government is in place.
Kate Smith, head of pensions at Aegon, commented:
"Issues like the strengthening of master trust regulation through the Pensions Bill 2017 are keenly awaited, as is the Government’s response to the Cridland Review, although a delay in responding fully to contentious decisions around State Pensions could work in the Government’s favour.
“Other casualties of the snap election could include the Finance Bill which was expected to get Royal Assent in July, and the Queen’s Speech, originally scheduled for June, which was touted to set out another Pensions Bill to tackle pension scams."
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Comments
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Oh for gods sake, you privileged bunch of whiners. Only 8% of estates incur any inheritance tax so if you're receiving or leaving some you're likely to be amongst the richest in this country. And what's the greatest reason for the division of wealth in this county? Yes, inheritance. No-one is begrudging you a share of an estate but if you live here, you should pay your share. Saying half a million isn't much, ridiculous! And yes my family paid their share without complaint.
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I'm glad its been scrapped! Why the Conservatives would ever put forward a measure like this is beyond me - except that their 2015 manifesto commitment (thought up on the hoof!) came back to bite them as few tax levers were available to the chancellor (although why they keep freezing fuel duty is beyond me). I doubt that we'll see it again after the 2017 election as I think the commitment not to raise other taxes will be softened. A parliamentary committee has suggested that the increase in probate fees smelt like and felt like a tax and therefore its introduction needed a different parliamentary procedure than that proposed by the government. Now that it'll become an election issue I don't think it'll be implemented in the original form - if at all.
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It is not a stealth tax on the rich. It is taking money from the next generation that the person who has died has managed to reserve to help his family. The people being robbed are far from rich and will need their inheritance to help them have some comfort in their later years so that they in turn can try to make provision for their children. If we must have inheritance tax, then it should be moved from the size of the estate to the size of the inheritance and everybody should have a tax free inheritance allowance of £500,000. That way we would retain a core of people who were not quite poor and who could help to drive the economy.
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27 April 2017