[fusion_text]The Chancellor’s most recent budget exposed plans of new probate fees, however many of us missed these. Previously it was simple, when we pass away we just needed to pay a flat fee of £215 but now, in some extreme cases, you could be liable to pay up to £20,000. It must be noted that the new fees are yet to come into play, we suspect this is because of May’s announcement of the snap General Election however we’re almost certain that they will be enforced at a later date.
Here, we give an insight of what the planned new probate fees are.
How much will my estate pay?
Estates below £50,000 will pay nothing at all – this applies to 58% of all estates in England and Wales, according to the Government.
But all estates worth more than £50,000 will be forced to pay increased fees.
How much will probate cost your estate: the proposed fees[/fusion_text][fusion_text]
| How much will probate cost your estate? | Size of estate (England and Wales) |
|
Up to £50,000 or exempt from requiring a grant of probate |
|
| £0 | £50,000 – £300,000 |
| £300 | £300,000 – £500,000 |
| £1000 | £500,000 – £1m |
| £4000 | £1m – £1.6m |
| £8000 | £1.6m – £2m |
| £20000 | Above £2m |
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Ministry of Justice
The Ministry of Justice confirmed the changes, despite nearly total opposition. At its crudest, one could argue that this is yet another stealth tax being levied by the Government, which can add up to 1% in fees on the value of an estate.
“These proposed changes will add further complexity to estate planning. Using trusts can help reduce the value of an estate for inheritance tax purposes, meaning a lower charge will apply.
“People concerned about how beneficiaries will pay the probate fees could leave sufficient funds in a life insurance policy, and provided the policy is written in trust, it can be accessed immediately on death, without the need for probate.”
In its official response to the consultation, the Government said while it understood concerns over the level of the proposed fees, the increases “are necessary” to fund the courts and tribunal systems “in the long term”.
You pay your probate fees at the same time as sending your application form to the Probate Registry. You should also include the inheritance tax form at this point, even if you don’t think there is any tax due.
Without getting political, these are simply eye watering increases.
ACTION!
If you have Investment Bonds we can place these in a Probate Trust now, whilst you are alive. This allows us to nominate the beneficiary now, and most importantly reduces any probate fees in the future. Contact us now so we can arrange for a Probate Trust to be added to your investments bonds.[/fusion_text]
