Government announces probate fees hike - MSE News

Former_MSE_Naomi

The Government has announced changes to probate fees which means some will pay almost £6,000 more - but for estates worth less than £50,000 you won't pay anything at all...

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'Government announces probate fees hike'

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Rubik

There's more information in Today's Wills and Probate - https://www.todayswillsandprobate.co.uk/main-news/government-increase-probate-fees/

Taxing the dead - you really couldn't make this up.

George Hodgson of STEP sums it up beautifully "And although the Government has reduced the charges, it has not dealt with the fundamental principle of using bereaved families to prop up the legal system"

Tom99

Don't worry about paying the £2,500, you will get it all back.

Justice minister Lucy Frazer says the fees:

"are recoverable from the estate"

kathrynha

A headline that is written to make you think the worse.


From your own article:
What are the changes?

The fees will depend on the amount the estate is worth:

• Estates worth less than £50,000 will pay nothing, meaning estates worth between £5,000 and £50,000 will save £215 compared to the current system.
• Estates worth from £50,000 up to £300,000 will pay £250, a rise of £35.
• Estates worth from £300,000 up to £500,000 will pay £750, a rise of £535.
• Estates worth from £500,000 up to £1 million will pay £2,500, a rise of £2,285.
• Estates worth from £1 million up to £1.6 million will pay £4,000, a rise of £3,785.
• Estates worth from £1.6 million up to £2 million will pay £5,000, a rise of £4,785.
• Estates worth more than £2 million will pay £6,000, a rise of £5,785.

So if the estate is small you don't pay that much really, and surely if the estate is worth more than 2 million, affording £6000 shouldn't be an issue.

Rubik

Tom99 wrote: »

Don't worry about paying the £2,500, you will get it all back.

Justice minister Lucy Frazer says the fees:

"are recoverable from the estate"

Yes they are, but that money has to be found in order to apply for the Grant of Representation - there are many families who will struggle to find that amount of money and may have to take out a loan.

Tom99

kathrynha wrote: »

So if the estate is small you don't pay that much really, and surely if the estate is worth more than 2 million, affording £6000 shouldn't be an issue.

[FONT=Verdana, sans-serif]Using that argument you might as well increase IHT to 50% or 60%, both would be affordable since you would still be left with 50% or 40%.[/FONT]

Uxb

Rubik wrote: »

Yes they are, but that money has to be found in order to apply for the Grant of Representation - there are many families who will struggle to find that amount of money and may have to take out a loan.

It will be done exactly as IHT is current done.
You have to pay the IHT (apart from that due on property) before you are allowed to apply for probate
So how do think that works then?

It works by a procedure called "direct pay" when the IHT is paid directly from the bank accounts of the deceased to HMRC by special arrangement between HMRC and the financial groups.

I imagine the news probate fees will work on the same basis.

Rubik

Uxb wrote: »

It will be done exactly as IHT is current done.
You have to pay the IHT (apart from that due on property) before you are allowed to apply for probate
So how do think that works then?

It works by a procedure called "direct pay" when the IHT is paid directly from the bank accounts of the deceased to HMRC by special arrangement between HMRC and the financial groups.

I imagine the news probate fees will work on the same basis.

Assuming, of course, there are sufficient funds in the deceased's bank to pay the IHT. This isn't always the case.

Yorkshireman99

Rubik wrote: »

Yes they are, but that money has to be found in order to apply for the Grant of Representation - there are many families who will struggle to find that amount of money and may have to take out a loan.

If there is cash in the estate the bank will pay direct just like funeral costs.

Yorkshireman99

Rubik wrote: »

Assuming, of course, there are sufficient funds in the deceased's bank to pay the IHT. This isn't always the case.

Banks will loan the amount to the estate just as they will to pay IHT and the loan is repaid when the assets are liquidated,

getmore4less

There are plenty of estates that currently apply for probate that could with a bit of asset planning bypass the process completely.

I suspect there are quite a few that only do it for a house in joint names TIC when that is not needed.