Plans to hike probate fees to as much as £6,000 have narrowly been approved following a committee hearing this morning.
The Fourteenth Delegated Legislation Committee voted by nine votes to eight to approve a statutory instrument (SI) applying a sliding scale of charges based on the value of estates rather than a flat fee.
The SI will now go before the House of Commons where it will, barring a majority of objections, be passed. The changes would come into force in April.
Under the plans, probate charges will be linked to the size of the estate with the wealthiest estates (those valued at more than £2m) facing a £6,000 charge. It would replace the current flat fee of £215, or £155 for those applying through a solicitor, on estates of any size. Estates valued at under £50,000 will be exempt from charges. Previously estates under £5,000 were exempt.
Justice minister Lucy Frazer QC said the new measures would introduce a ‘progressive’ banded system. She rejected criticism from two committees and the House of Lords which suggested that the new fees amounted to a misuse of powers by the lord chancellor.
Frazer pointed to Section 180 of the Anti-Social Behaviour, Crime and Policing Act 2014 which she noted gives the lord chancellor the power to set certain fees above cost recovery levels in order to help maintain the efficient and effective operation of the rest of the system. According to Frazer, the changes will generate £145m for the Ministry of Justice in the next financial year.
For the opposition, Labour’s shadow justice minister Gloria De Piero said the charges amounted to a ‘tax on grieving families’.
Reacting to the news Law Society president Christina Blacklaws said the cost to the courts for granting probate does not change whether the estate is worth £50,000 or £2 million. ‘Under the new proposals, some estates would face a charge of £6,000. This is excessive, particularly when compared to the current fee of £215, or £155 if done by a solicitor. It is unfair to expect the bereaved to fund or subsidise other parts of the courts and tribunal service, particularly in circumstances where they have no other options but to use the probate service,’ Blacklaws said.
Nicola Evans, charities counsel at national firm BDB Pitmans, said: ’It is disappointing that it has got this far – the power to charge enhanced fees was presented to Parliament as being for wholly different circumstances than exist for probate fees, which is a non-voluntary, administrative process. If MPs do not now stand up to oppose the order, they will be allowing a minister to impose a new tax which undermines the principles of the inheritance tax regime, with resulting cost to families and charities.’
The Institute of Legacy Management said the changes could cost charities in the region of £10m annually in legacy income.
A spokesperson told the Gazette: ‘Despite our objections, the government has gone ahead with the proposals and from April, the fees will increase. We were pleased, however, that eight of the 17 MPs that voted were against the changes, and we look forward to seeing the improvements to HMCTS that the Ministry of Justice has promised will be funded from the increased fees.’
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