Proposals to increase a sliding scale of charges to administer probate have been described as “truly alarming” by FBCMB's Michelle Monnes-Thomas.
Michelle Monnes-Thomas, an Associate with the firm’s Wills, Probate and Lifetime Planning team, labelled the planned increase by the Ministry of Justice as “effectively a tax by the back door” for anyone leaving more than £50,000.
The Government wants to swap the existing flat fee of either £155 or £215 for a fee that is proportionate to the size of the estate and increases in relation to the value.
This could mean a cost of £300 for estates from £50,000 to £300,000 up to £20,000 for estates of more than £2 million. Estates of less than £50,000 will not have to pay a fee.
Michelle said: “It would be truly alarming if those sorts of fees are introduced. It is effectively a tax by the back door and more money that families will lose out on.
“Many people’s hard earned money is already subject to inheritance tax which leaves a bitter taste. Increased fees to administer probate will sour that even further. If people are facing increased charges, they will be less inclined to use lawyers to assist with probate and this can lead to mis-administered estates and errors, which could prove costly.
“There’s also a risk that if for some families the only asset is a house, they may not have the ability to pay the court fees if there is no liquid assets. This would put a strain on families to find the fee.”
The Ministry of Justice is currently consulting on the proposals with a deadline of the end of April.
Michelle said she was concerned that any changes could have a bigger impact on people’s financial affairs than the Ministry of Justice thought.
“I believe that people might start transferring assets during their lifetime so that they avoid having an estate to deal with or so that the estate falls within a lower fee bracket. This could cause all sorts of problems from a tax perspective and complicate people’s financial affairs even more if they don’t seek professional advice,” she added.
“The Probate Registry will not be doing anything different for the increased fees as it is the same process regardless of the amount of the estate. If anything, with an estate that is taxable, they do not check the tax return but send it straight to HMRC so they are, in fact, doing less work on the higher value estates that they plan to charge more on.”
To discuss Wills, Trust & Lifetime Planning questions with Michelle you can contact her on 01902 392484 or email@example.com