MSE News: Probate fees set to skyrocket from next month
Comments
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Yorkshireman99 wrote: »Really? What about all the overheads of running the Probate service and the Chancery division of the Court? Why should it fall on the taxpayer rather than the user of the service?
It doesn't - it costs around £166 and it's more than covered by the existing fees:
House of Commons Library Briefing Paper
The Bar Council also set out this information about the process
involved in granting probate:
While the probate registry is historically part of the England
and Wales court system, the grant of probate itself is not in
reality a judicial or court act at all. It is a simple but
authoritative piece of paper, bearing a stamp, produced by
a civil servant on a relatively low pay grade in a relatively
short period of time, the average cost of which is £166.
There are only one or two registrars left in the probate
registry, who now cover the entire country. The real
scrutiny given to grants of probate is by HMRC. While the
probate is not quite a rubber stamp, it is little more. We
note that it is only when probate cases become contentious
that they use up court time, at which point separate court
proceedings are issued, generating separate fees.0 -
Noted. So in future alll those estates that will pay no fee will be subsidised by the higher value estates. Hence much of the increase will not provide extra revenue for the Treasury. So much for it being a tax! In any case how do you think public services get paid for other than by taxation? In the end someone, somewhere, has to pay. As I see it the new fees move the burden to those most able to afford it. Sounds more like a left wing policy than a Tory one!It doesn't - it costs around £166 and it's more than covered by the existing fees:
House of Commons Library Briefing Paper
The Bar Council also set out this information about the process
involved in granting probate:
While the probate registry is historically part of the England
and Wales court system, the grant of probate itself is not in
reality a judicial or court act at all. It is a simple but
authoritative piece of paper, bearing a stamp, produced by
a civil servant on a relatively low pay grade in a relatively
short period of time, the average cost of which is £166.
There are only one or two registrars left in the probate
registry, who now cover the entire country. The real
scrutiny given to grants of probate is by HMRC. While the
probate is not quite a rubber stamp, it is little more. We
note that it is only when probate cases become contentious
that they use up court time, at which point separate court
proceedings are issued, generating separate fees.0 -
Per 'Which?':
Increased government revenue
The Institute of Chartered Accountants in England and Wales has criticised the proposal, calling it a ‘revenue raising exercise, unrelated to the costs of the service provided’. Others have called it a ‘stealth tax’. Each year, more than 250,000 applications are submitted for a grant of probate. Fees currently raise £46m, but the proposed fee increases would raise an extra £256m a year for the courts service.
I give up - we aren't going to agree. You can argue with yourself if you like.
0 -
DocN
FWIW I agree with you.0 -
Thanks for that. It is not a figure I had seen before. Most of the uproar seemed to have been unfounded. This changes my view assuming it is an accurate figure. Nevertheless the cost of the Court Service and the Probate Office have to come from the public in one way or another. Semantics does not change that. Lots of taxes don't fall on those who cost the exchequer the most.Per 'Which?':
Increased government revenue
The Institute of Chartered Accountants in England and Wales has criticised the proposal, calling it a ‘revenue raising exercise, unrelated to the costs of the service provided’. Others have called it a ‘stealth tax’. Each year, more than 250,000 applications are submitted for a grant of probate. Fees currently raise £46m, but the proposed fee increases would raise an extra £256m a year for the courts service.
I give up - we aren't going to agree. You can argue with yourself if you like.0 -
Per 'Which?':
Increased government revenue
The Institute of Chartered Accountants in England and Wales has criticised the proposal, calling it a ‘revenue raising exercise, unrelated to the costs of the service provided’. Others have called it a ‘stealth tax’. Each year, more than 250,000 applications are submitted for a grant of probate. Fees currently raise £46m, but the proposed fee increases would raise an extra £256m a year for the courts service.
I give up - we aren't going to agree. You can argue with yourself if you like.
250k is around the right number of estates that get a grant making the average on £46m around £190 which is in line with the current fee £215 if you took out those that did not pay a fee.
if we use the consultations ranges of estates
Up to £50,000 58% £0
not exceed £300,000 23% £300
not exceed £500,000 11% £1,000
not exceed £1m 6% £4,000
not exceed £1.6m 1% £8,000
not exceed £2m 0.3% £12,000
Above £2m 0.5% £20,000
roughly on 500k estates each year
290,000 £0
115,000 £300 £34.5m
55,000 £1000 £55m
30,000 £4000 £120m
5,000 8,000 £40m
1,500 £12,000 £18m
2,500 £20,000 £50m
£327.5m
those are inline with the figure on IHT statistics although some look a bit high based on 2014(latest) numbers
500-1m was 14k and that is estimated at 30k
over 1m was 3,200 total now estimated 9k
2014 around 150k estsate were in the upto 300k range0 -
Malthusian wrote: »For God's sake nobody tell Doc N that there's a tax called National Insurance which doesn't actually buy you insurance. Or that there's a Value Added Tax which doesn't add any value.
1. NI is a hidden income tax
2. The words before "tax" indicate the thing that is taxed, not what the tax does. Income tax doesn't give me income, it taxes my income. VAT doesn't add value, it is a tax on the value added to products by each step in their production0 -
1. NI is a hidden income tax
Au contraire, it's an overt income tax.2. The words before "tax" indicate the thing that is taxed, not what the tax does. Income tax doesn't give me income, it taxes my income. VAT doesn't add value, it is a tax on the value added to products by each step in their production
And a probate fee is a fee charged on estates that go to probate. The idea that it should solely cover the costs incurred by the Government of administering people's estates and nothing else has no basis either in law or in previous practice. It's a post hoc justification for the idea that the fees are "unfair" and the Government should have left them as they were. Which is a perfectly valid thing to believe, the trouble is that the Government could equally have left Inheritance Tax as it was and not introduced a residential nil rate band which will save many estates considerably more than they will pay on the new probate fees. The State giveth and the State taketh away again. Blessed be the name of the State. Or failing that, don't curse the State when it taketh away and go "meh" when it giveth, that's a short road to baseline misery.0 -
I'm a bit surprised at most of the responses to this thread. I've looked at the responses to the consultation about this and it is clear that virtually all the objections have been steam rollered over. You can see them here:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/594451/probate-consultation-response.pdf
The MoJ's own data show that, as of now, 6% of estates in England will have to pay the £4000 and 2% between £8000 and £20000. I would predict that in 5 years time that will change to about 10% and 4%. Also. history shows that any new tax the UK government introduces doubles every decade (for example look at insurance tax!), so we can expect to fees to follow suit. Also, the MoJ don't seem to have considered circumstances such as where an estate may have been overvalued for IHT purposes, pushing it slightly over a cliff-edge. For example, an estate might be valued at £520k for IHT, pushing it into the £4000 probate tax band, yet only we worth £490k after a property sale. Overpaid IHT is refunded but will the £3000 overpaid probate tax be refunded?0 -
I've just found this impact assessment of the fee hike by the MoJ, which is quite an eye opener.
https://consult.justice.gov.uk/digital-communications/fee-proposals-for-grants-of-probate/results/probate-impact-assessment.pdf
It is clear from the first few paragraphs that probate fees are seen as a cash cow, with nothing else considered to fund the judicial system. Paras 49 to 53 show how cynical they are in the analysis of the general public! Para 48 is particularly nasty as it points out in black and white that there are no alternatives to an application for probate so the huge hike in income is assured for perpetuity. So much for Phil Hammond saying there wouldn't be any death taxes!0
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