Probate fees

castle96

"Inheritance tax was discharged and paperwork submitted to HMRC on the 19th February. They take at least 3 weeks to issue a receipt (maybe longer as they are probably busy at the moment) and only then we can apply for Probate. We still have over 3 weeks before the fees are set to go up (if they do). I will let you know once we’ve applied"

this from solicitors letter. Fees ARE set to go up aren't they ? (from 1/4 ?). Seems unfair to have new fees applied because HMRC delays (3 weeks !)

Yorkshireman99

castle96 wrote: »

"Inheritance tax was discharged and paperwork submitted to HMRC on the 19th February. They take at least 3 weeks to issue a receipt (maybe longer as they are probably busy at the moment) and only then we can apply for Probate. We still have over 3 weeks before the fees are set to go up (if they do). I will let you know once we’ve applied"

this from solicitors letter. Fees ARE set to go up aren't they ? (from 1/4 ?). Seems unfair to have new fees applied because HMRC delays (3 weeks !)

The probate application is usually included with the IHT paperwork. Did this not happen?

castle96

good Q. Sister is Executor, but solicitor is dealing with paperwork

Spreadsheetman

Yorkshireman99 wrote: »

The probate application is usually included with the IHT paperwork. Did this not happen?

That's certainly what I did when I sent my late Father's Administration application in at the beginning of Feb. The cheque I sent was cashed a week after they received the paperwork.

Rich2808

I am going through the probate process at present for my deceased father - and have a question about the new probate fees.

The value of the estate was around £265,000 - almost all of which was my father's half share of their house which passes to my mother as his spouse. Some of his savings are passed to me but my mother gets the bulk. I have done the IHT205 estate report on line and this gave me a gross estate figure of £8,500 (didn't sound right to me?!) and a net figure of zero.

I am assuming for the purposes of probate fees it is the £265,000 figure (total assets less liabilities) which determines the fee - not the gross estate figure of £8.5k. So if we action probate before 1 April we would pay £215 - and £250 thereafter (fee for £50k to £300k) - rather than £215 now vs zero from 1 April.

So it makes sense for us to apply this month?

Tom99

Rich2808 wrote: »

I am assuming for the purposes of probate fees it is the £265,000 figure (total assets less liabilities) which determines the fee - not the gross estate figure of £8.5k. So if we action probate before 1 April we would pay £215 - and £250 thereafter (fee for £50k to £300k) - rather than £215 now vs zero from 1 April.
So it makes sense for us to apply this month?

I am not sure that is correct. You do not need probate for jointly owned assets which pass directly to the surviving joint owner, eg joint bank account and property held as joint tenants. I had assumed the new scale fee would not apply to these assets but only the Net estate in the UK for the grant of representation.

Rich2808

Tom99 wrote: »

I am not sure that is correct. You do not need probate for jointly owned assets which pass directly to the surviving joint owner, eg joint bank account and property held as joint tenants. I had assumed the new scale fee would not apply to these assets but only the Net estate in the UK for the grant of representation.

Thanks.

Is there actually a clear definition then of what the value of the estate for probate fee purposes is under the new arrangements from April? Seems odd that a £2m estate left solely to a wife pays no fees but a £51,000 estate left to a son has to pay £250 from April?

The Government consultation states the fee is based on the he value of the estate (after outstanding debts, but before inheritance tax liabilities have been applied)?

I assumed it would be based therefore on the gross estate value less funeral expenses and debts - although I wasn't clear in my case how a gross estate worth £265k with around £30k of assets not left to the spouse only had a gross value of around £8k based on the IHT return?

Tom99

Rich2808 wrote: »

I assumed it would be based therefore on the gross estate value less funeral expenses and debts - although I wasn't clear in my case how a gross estate worth £265k with around £30k of assets not left to the spouse only had a gross value of around £8k based on the IHT return?

Download a pdf copy of the IHT205 and put the numbers in that, you will then see whether £8k was the right figure.

Rich2808

Tom99 wrote: »

Download a pdf copy of the IHT205 and put the numbers in that, you will then see whether £8k was the right figure.

Will do that.

It was the calculated gross estate figure I was given by the online HMRC calculation for the probate application when I did the online declaration. It is much less than the total estate - even the total estate not passing to my mother (as spouse) less funeral expenses/debts which is about £30k. I wasn't clear how £30k became £8k?

I think my issue then is if i wait 3 weeks do I save £215 - i.e. I pay £215 now or zero in 3 weeks as the estate value not passing to my mother is below £50k? Or would I be £35 worse off as the gross estate value is £265k including assets passing to my mother as spouse so the fee is £250?

Cos its about as clear as mud - and surely given the scale of the new fees for some estates a bit more clarity is needed (is it gross estate or gross estate less elements passing to a spouse?).

castle96

Yorkshireman99 wrote: »

The probate application is usually included with the IHT paperwork. Did this not happen?

Seems not. Solicitor should have ? done that especially as we may now fall foul of the new fees. Is £215 now, will be £2500 !!
When in April do the new fees come in ?

Rich2808

castle96 wrote: »

Seems not. Solicitor should have ? done that especially as we may now fall foul of the new fees. Is £215 now, will be £2500 !!
When in April do the new fees come in ?

I think the Government still has to pass the necessary secondary legislation to implement the changes. It’s a bit focused on Brexit but the aim is to introduce the changes next month.

Unlike you I am by contrast keen to see the changes implemented as the value of the estate I am looking after has a value (i.e. excluding joint assets and after funeral expenses etc) which is less than £10k as almost the entire estate passes to my mother via jointly held assets.

While there is a focus on who is paying more less coverage is given to those estates valued from £5k to £50,000 who will pay nothing compared to £215 now – an estimated 25,000 cases a year (e.g. estate where assets are mostly held jointly with spouses but which have small savings/assets held in sole accounts passing to other family members).
The current charge equates to nearly 5% of the estate value for an estate worth just over £5,000 – the new charge on estates over £2 million equates to a mere 0.3% of the estate value. The current system is hardly fair or progressive therefore given an estate worth £5,100 pays the same as one worth £10 million.

Given the inheritance tax threshold rises in recent years many estates will have saved far more in IHT – particularly for family homes passing to children - than they will pay via these new fees.