Shocking hike in fees could hit the recently bereaved with bills of £20,000

Unfair, say lawyers, accountants and charities

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Shocking hike in fees could hit the recently bereaved with bills of £20,000

Experts are speaking out against the government's planned hike to probate fees that could see some families paying tens of thousands of pounds.

Under the current system, there's a flat fee of up to £215 payable before an executor is allowed to administer an estate after death.

However, the Ministry of Justice is planning to introduce a sliding scale for payments instead. This will benefit people inheriting smaller sums, as nothing will be payable on estates worth less than £50,000, rather than £5,000, as now.

However, estates worth between £50,000 and £300,000 will pay £300, while those worth between £300,000 and £500,000 will pay £1,000.

It'll cost £4,000 for estates worth between £500,000 and £1 million; £8,000 for those worth between £1 million and £1.6 million, £12,000 for those valued at between £1.6 million and £2 million, and a whacking £20,000 above that.

However, critics point out that the work involved is exactly the same whatever the size of the estate - and not particularly onerous at that.

"The MoJ argue that the current system, where smaller estates pay the same fees as large ones, is 'not equitable'. That of course, is nonsense," says Mark Giddens of accountancy firm UHY Hacker Young.

"The fee has always been intended to cover administrative costs and these are the same regardless of the size of the estate. What the MoJ really mean is that they have discovered a new stealth tax - and one which they hope will raise in excess of £250 million per annum."

And with house prices continuing to rise, many more people look set to be paying far more than before. Farmers look set to be particularly vulnerable, warns the Law Society, as properties tend to be high-value, but there's often a shortage of cash.

And, says Emily Deane, technical counsel of family charity Step, many families will be forced to apply for bridging loans to pay the fee while they wait for the estate to be released.

"We anticipate that the financing will incur further delay, cost and administrative burden to the detriment of the executors and the beneficiaries. In practice it may also prove difficult to obtain bridging loans for this purpose due to money laundering requirements," she says.

"It may become a common scenario that the executors and beneficiaries are forced to sell the house in order to raise the requisite funds."

Consultation on the proposals closed in April and the government is now considering the responses it received.

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