Changes to Probate fees
The Government recently announced changes to probate fees which from April may see some estates paying almost £6,000 more whilst estates worth less than £50,000, won’t pay anything at all.
Applicable in England and Wales, probate fees will now be paid as a sliding scale depending on how much the estate is worth, rather than as a flat fee of £215, or £155 if you apply through a solicitor, on estates over £5,000.
This threshold at which probate fees needs to be paid is set to be lifted to £50,000 from April 2019. Estates worth between £50,000 and £300,000 will be charged £250, while the maximum charge is £6,000 for estates worth £2 million or more.
- Estates worth less than £50,000 will pay nothing.
- Estates worth from £50,000 up to £300,000 will pay £250, a rise of £35.
- Estates worth from £300,000 up to £500,000 will pay £750, a rise of £535.
- Estates worth from £500,000 up to £1 million will pay £2,500, a rise of £2,285.
- Estates worth from £1 million up to £1.6 million will pay £4,000, a rise of £3,785.
- Estates worth from £1.6 million up to £2 million will pay £5,000, a rise of £4,785.
- Estates worth more than £2 million will pay £6,000, a rise of £5,785.
How does Probate work?
When someone dies and leaves property, money and possessions this is collectively known as their estate – the executor of the Will needs to distribute this according to the persons’ final wishes.
If the deceased left a Will and appointed an executor, that person will need to apply for a ‘grant of probate’. However, if there is no Will, the next of kin must apply for what is known as a ‘grant of letters of administration’.
The executor or next of kin will then need to obtain a ‘grant of representation’, which proves their authority to administer the estate.
The process of applying to the court for the grant and the document used to manage the estate is often generically referred to as ‘probate’ and incurs probate fees.
The next step for the executor is to:
- Gather any assets, eg, money left in bank accounts.
- Pay any bills.
- Distribute what’s left according to the Will.
Alex Astley, Partner at Gullands comments: “This is an area the Government has looked at before but it shied away from introducing the fees it proposed. A sliding scale does seem to be a fairer way of calculating fees, but it may come as a surprise to people who haven’t planned for it. We urge everyone to make sure they have an up to date Will as a starting point and to make sure it is reviewed every few years, or on major events such as marriage, divorce, the birth of a child or grandchildren etc.”