Plans to increase probate fees have been scrapped by the Government.
With the snap General Election announced earlier this week due to take place in June, the Ministry of Justice announced there was no longer sufficient time to run the legislation through parliament.
It's up to the next Government to decide whether they want to bring the plans back – and there's no guarantee that they will, even if the Conservatives are re-elected.
Currently a fixed fee of either £155 (if applied for by a solicitor) or £215 (if applied for by an individual) is paid to the courts in order to grant probate, so executors can distribute the proceeds of someone’s will.
The fee is only paid if an estate is worth more than £5,000.
How it would've worked
Had plans gone ahead, fees would've been set on a sliding scale, as detailed below.
|
Value of estate |
Proposed fee |
|
Up to £50,000 |
£0 |
|
Over £50,000 up to £300,000 |
£300 |
|
Over £300,000 up to £500,000 |
£1,000 |
|
Over £500,000 up to £1 million |
£4,000 |
|
Over £1 million up to £1.6 million |
£8,000 |
|
Over £1.6 million up to £2 million |
£12,000 |
|
Over £2 million |
£20,000 |
The threshold for the fee would have risen to £50,000, meaning millions of people wouldn't have been paying anything at all – an estimated 58% of estates would not have been liable for a probate charge thanks to the change.
However, the estates that paid a probate fee would have forked out substantially more, from £300 for estates worth £50,000 to £300,000 and up to £20,000 for estates worth more than £2 million.
The proposed hike was strongly criticised by financial advisers, describing it as a stealth tax on the rich.
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What other Bills might be scrapped?
So far, this is the only plan to be scrapped by the Government in the run-up to the unexpected General Election.
However, it may be that other complicated financial legislation is put on ice until a more stable Government is in place.
Kate Smith, head of pensions at Aegon, commented:
"Issues like the strengthening of master trust regulation through the Pensions Bill 2017 are keenly awaited, as is the Government’s response to the Cridland Review, although a delay in responding fully to contentious decisions around State Pensions could work in the Government’s favour.
“Other casualties of the snap election could include the Finance Bill which was expected to get Royal Assent in July, and the Queen’s Speech, originally scheduled for June, which was touted to set out another Pensions Bill to tackle pension scams."