Probate fees to increase from April 2019 - are you prepared?
The Ministry of Justice announced last year that probate fees in England and Wales - paid when administering someone’s estate after they die - will now be based on a sliding scale rather than the current flat fee.
The current fee is £215 for individuals and £155 for those applying through a solicitor. The charge is the same regardless of the size of the estate. At the lower end of the scale, the new proposals will see estates worth between £50,000 and £300,000 charged £250 whilst those worth over £2m will pay a maximum of £6,000.
The proposed scale:
- Estates worth more than £2 million will pay £6,000, a rise of £5,785.
- Estates worth from £1.6 million up to £2 million will pay £5,000, a rise of £4,785.
- Estates worth from £1 million up to £1.6 million will pay £4,000, a rise of £3,785.
- Estates worth from £500,000 up to £1 million will pay £2,500, a rise of £2,285.
- Estates worth from £300,000 up to £500,000 will pay £750, a rise of £535.
- Estates worth from £50,000 up to £300,000 will pay £250, a rise of £35.
- Estates worth less than £50,000 will pay nothing.
This significant rise in the fees has been described by many as a 'stealth tax' being levied by the Government. The hike will be particularly difficult for those individuals who are asset-rich having benefited from soaring property prices, but are cash-poor, particularly if, as reported, the fees need to be paid up-front.
How can I avoid high probate fees?
The key is not to panic. As solicitors, our concern is that many people may try to avoid probate altogether or feel pressure to give away some of their assets during their lifetime to mitigate the risk of high fees in the future.
However, transferring assets such as properties to family members can be fraught with problems. An unexpected development such as a divorce in the family, a sudden death or a family member getting into financial difficulties may result in the property having to be sold.
That’s why it’s important to seek professional legal advice as soon as possible before making any quick decisions that you or your loved ones may come to regret. It might be a better option to place your property or your assets into a Trust. This could help to reduce the value of your estate for Inheritance Tax (IHT) purposes.
There are other options available if you are worried about how your beneficiaries will pay probate fees. We have the experience and expertise to help you with all your estate planning needs and can find a solution that works for you quickly and effectively.
Our specialist probate and estate planning team are on standby to help anyone concerned about probate fees ahead of the planned increase in April. Putting your estate planning in order now could help you avoid rising probate fees and protect your financial assets in the longer-term.
To contact the team please call 01225 485700 or email email@example.com