Surprise increase in Probate fees surprisingly dropped5.05.2017
The surprise increase in Probate fees announced in the spring budget and which was due to come into force in May 2017, has now been surprisingly dropped. This is due to the announcement of the General Election on 8 June, as there is not going to be sufficient time to get the Bill through Parliament. It is unclear at this stage whether, if the Conservative Government is re-elected, it will still progress.
Other good news is that from 5 April 2017, each individual can claim an additional allowance of £100,000 to offset the sale of a family home on death on top of their existing £325,000 inheritance tax exemption. By 2020 this will rise to £175,000 allowing a couple to pass on £1 million estates tax free.
These new rules need careful reading as this new allowance is only available if the property has been the person’s main residence at some point and is being inherited by children, stepchildren, adopted children or grandchildren. The new rate will not apply if property is left to nieces or nephews or brothers or sisters. It is also not available if the property is being left in Trust.
Estates worth more than £2 million will see a ‘claw back’ on this Inheritance Tax relief losing £1 of the allowance for every £2 in extra wealth. Business owners are also likely take an extra hit because of this new rate.
I suspect there are many people who will have Wills which are out of date and specialist advice should be sought on the best way to plan for these new rates.
The old saying of the only two things in life of which we can all be certain – death and paying taxes is still true, but all this uncertainty makes estate planning difficult and also something which should be regularly reviewed.