A plan for a probate fees “stealth tax” has been ditched, as the Ministry of Justice announced it would instead increase the flat rate fee.
In a new consultation, the MoJ said that it planned to increase fees to £273 for all applicants, no matter the size of the estate.
This will mean the cost of probate, which is the process of administering an estate following a person’s death, will rise from £155 for those who use a solicitor and from £215 for who act as an individual.
The MoJ argues the £273 covers the current costs of processing probate applications and will not generate any profit for the Government.
Instead, officials said it would actually save the taxpayer money by making the service self-sufficient without the need for external funding.
The MoJ said it had ditched in 2019 its proposed so-called “stealth tax” reforms, which were based on a sliding scale of fee depending on the estate.
Instead, all users will pay the same £273 fee, unless the size of the estate means it is not eligible for a fee. Only estates worth no more than £5,000 will not attract a fee, which is the current position.
The MoJ’s 2019 plan provoked an outcry, with fees based on a sliding scale that increased depending on the value of the deceased’s estate. It was good news for estates valued at £50,000 or less as there would have been no fee at all but for those over that amount, there were significant hikes.
An estate valued between £50,000 and £300,000 would have been charged £250, whilst those in the £500,000 to £1 million bracket would have faced fees of £2,500.
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Those estates with assets in excess of £2 million would have attracted a fee of £6,000 under the new regime, an increase of £5,845 when compared to the probate fee currently payable.
The Government estimated it would raise £145 million in 2019-20, increasing to £185 million in 2023, to pay for court reforms and to fund areas of the court system where they charge no fees.
Now, under a flat rate fee, it is designed to be self-financing rather than raise money.
“Every penny from these fees will go towards the cost of processing applications – meaning taxpayers will no longer be forced to subsidise them,” said an MoJ spokesman.
The MoJ’s remissions scheme, Help with Fees, is also available and applicants who can demonstrate that they have suitably low means or income may receive a full or partial remission.
The current fee system was introduced in April 2014, and has not been increased or changed since then.