Brexit delays implementation of so-called ‘stealth tax’
Back in December 2018 we wrote a short short article about the Government’s controversial plans to increase probate fees this year. The reforms, expected to raise over £155million for the Treasury, were due to come into effect on 1 April 2019. Now it seems, they’ve been put on hold due to lack of parliamentary time.
The reforms have been in the offing for some time. Before the last general election in 2017, the government proposed to increase the Probate fee to £20,000. Abandoning these plans due to widespread opposition, a new draft of the Non-Contentious Probate Fees Order 2018 was laid before parliament in November 2018 (this time with lower proposed fees to appease the critics).
The 2018 order passed through the House of Lords with a statement of regret and was narrowly voted through the secondary legislation scrutiny committee.
In the committee’s view, the reforms ‘arguably amount to a ‘stealth tax’ and, therefore, a misuse of the fee-levying power’, an opinion fully supported the opposition frontbench, the Law Society, and Solicitors for the Elderly.
Proposals in brief
In their current guise, the proposed reforms would replace the current flat rate of £215 for granting official approval of any will – on a sliding scale. Under the plans the largest fee payable would be £6,000 for any inheritance worth more than £2m.
Proposed Probate fees as they currently stand:
|Size of the estate||Current Fee||New Fee||Difference|
|Up to £50,000||£215||No charge||– £215|
|£50,000 – £300,000||£215||£250||+ £35|
|£300,000 – £500,000||£215||£750||+ £535|
|£500,000 to £1m||£215||£2,500||+ £2,285|
|£1m to £1.6m||£215||£4,000||+ £3,785|
|£1.6m- £2m||£215||£5,000||+ £4,785|
|Above £2m||£215||£6,000||+ £5,785|
A spokesman for the MoJ has said that Brexit matters were taking precedence (no surprise there) and, whilst the plans were temporarily delayed, the reforms would come into force ‘as soon as possible’.
HM Revenue & Customs announced at the end of March that it has introduced a temporary process for probate applications, as it is preparing to switch to the new fee structure.
The tax office stated it will accept applications for probate before an inheritance tax account has been processed.
However, criticism is unlikely to fall away. It’s clear that Labour will block government plans to introduce the new fees and leading figures in the legal, charitable and financial sectors remain steadfast in their criticism, calling them “a tax on grief.”
As things stand, there is no official date set for the plans to be brought before parliament and no guarantee that the proposals will be voted in.
Naturally, we will keep our eye on developments and issue an update as soon as we know more.
If you are concerned about the proposed changes, or have any other questions regarding wills, estate planning, probate or the administration of an estate, please contact us. We’re here to help.
Please note that all views, comments or opinions expressed are for information only and do not constitute and should not be interpreted as being comprehensive or as giving legal advice. No one should seek to rely or act upon, or refrain from acting upon, the views, comments or opinions expressed herein without first obtaining specialist, professional or independent advice. While every effort has been made to ensure accuracy, Curtis Parkinson cannot be held liable for any errors, omissions or inaccuracies.