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  • FIRST POST
    • MSE Steve
    • By MSE Steve 6th Apr 17, 3:45 PM
    • 43Posts
    • 20Thanks
    MSE Steve
    MSE News: Probate fees set to skyrocket from next month
    • #1
    • 6th Apr 17, 3:45 PM
    MSE News: Probate fees set to skyrocket from next month 6th Apr 17 at 3:45 PM
    The cost of sorting out someone's property, money and possessions after they've died will increase for many next month, with some to face fees of £20,000...
    Read the full story:
    'Probate fees set to skyrocket from next month, despite parliamentary challenge'

    Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
Page 2
    • Yorkshireman99
    • By Yorkshireman99 7th Apr 17, 4:54 PM
    • 2,163 Posts
    • 1,757 Thanks
    Yorkshireman99
    From the Telegraph (hardly a left of centre paper!).

    Get used to stealth taxes – they’re now the Tories’ favourite weapon

    This is, in effect, a new death tax – an ingenious idea but one that is, unfortunately, illegal. The Justice Secretary has no authority to raise taxes. Only the Chancellor can, and even he needs the approval of Parliament. Ms Truss had sought to disguise her scheme as a “fee” rather than a tax and she might have succeeded had a parliamentary committee not blown the whistle on her. She may try to go ahead anyway, and run the risk of a judicial review. But for the Justice Secretary to be hauled up for illegal racketeering is not the best look.
    Originally posted by Doc N
    Pure unadulterated BS. I am amazed that the Telegrapgh printed it. More typical of the Grauniad.
    Last edited by Yorkshireman99; 07-04-2017 at 5:13 PM.
    • Doc N
    • By Doc N 8th Apr 17, 12:30 PM
    • 6,042 Posts
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    Doc N
    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?
    Originally posted by Yorkshireman99
    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.
    • Yorkshireman99
    • By Yorkshireman99 8th Apr 17, 3:39 PM
    • 2,163 Posts
    • 1,757 Thanks
    Yorkshireman99
    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.
    Originally posted by Doc N
    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!
    • Doc N
    • By Doc N 8th Apr 17, 3:46 PM
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    Doc N
    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.
    • POPPYOSCAR
    • By POPPYOSCAR 8th Apr 17, 3:54 PM
    • 10,051 Posts
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    POPPYOSCAR
    DocN

    FWIW I agree with you.
    • Yorkshireman99
    • By Yorkshireman99 8th Apr 17, 5:04 PM
    • 2,163 Posts
    • 1,757 Thanks
    Yorkshireman99
    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.
    Originally posted by Doc N
    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.
    • getmore4less
    • By getmore4less 8th Apr 17, 7:42 PM
    • 28,045 Posts
    • 16,806 Thanks
    getmore4less
    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.
    Originally posted by Doc N
    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 range
    Last edited by getmore4less; 08-04-2017 at 7:46 PM.
    • zerog
    • By zerog 10th Apr 17, 8:33 AM
    • 2,225 Posts
    • 751 Thanks
    zerog
    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.
    Originally posted by Malthusian
    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 production
    • Malthusian
    • By Malthusian 10th Apr 17, 11:58 AM
    • 1,878 Posts
    • 2,650 Thanks
    Malthusian
    1. NI is a hidden income tax
    Originally posted by zerog
    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.
    • briskly
    • By briskly 10th Apr 17, 5:31 PM
    • 137 Posts
    • 41 Thanks
    briskly
    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?
    Last edited by briskly; 10-04-2017 at 9:49 PM.
    • briskly
    • By briskly 10th Apr 17, 9:26 PM
    • 137 Posts
    • 41 Thanks
    briskly
    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!
    Last edited by briskly; 10-04-2017 at 9:47 PM.
    • Keep pedalling
    • By Keep pedalling 10th Apr 17, 10:59 PM
    • 2,919 Posts
    • 3,091 Thanks
    Keep pedalling
    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!
    Originally posted by briskly
    I do not read it that way. What it clearly is, is cross subsidation between court services. Larger fees for something that is easy and cheap to do, to go some way to paying for for a very expensive justice system that most of the people who go through it could not afford to pay for.

    The previous scheme to raise court costs, would have forced many innocent people to plead guilty to avoided the possibility of being hit massive court charges. As one of the 6% (2% if I manage to outlive my wife) I have no real objection to being taxed a bit more when I'm dead, especially as this coincides with having up to £140,000 wiped off a potential IHT bill.
    • briskly
    • By briskly 20th Apr 17, 11:25 AM
    • 137 Posts
    • 41 Thanks
    briskly
    Looks like it is definitely going ahead despite the challenge. Now buried in the election fever!

    https://hansard.parliament.uk/commons/2017-04-19/debates/8e10817e-1531-4fb4-affc-d3df01d68ae5/DraftNon-ContentiousProbateFeesOrder2017
    • Crabapple
    • By Crabapple 20th Apr 17, 6:32 PM
    • 1,481 Posts
    • 7,040 Thanks
    Crabapple
    The increased fees here are largely as to increase fees for many court costs would deny access to justice and probate is easy to justify in that context.

    The levels of these fees are a massive increase for many and whilst some increase can be reasonable, thousands per application is harsh.

    Strangely the OPG has just reduced the registration fees for LPAs as they were making a profit against the costs of processing!

    As an aside I presume mse don't bother reading these threads as their article is still wrong about the threshold for needing a Grant.
    Daughter born January 2012 Son born February 2014

    Slimming World ~ trying to get back on the wagon...
    • Doc N
    • By Doc N 21st Apr 17, 6:03 AM
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    • 18,937 Thanks
    Doc N
    Looks like it is definitely going ahead despite the challenge. Now buried in the election fever!
    Originally posted by briskly
    Gone - for now. A good time to die.


    "A senior Conservative declined to say if the scheme would be brought back if the prime minister was re-elected."


    I think we all know the answer to that one!
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