They also classed the rise as ‘a significant move away from the principle that fees for a public service should recover the cost of providing it and no more’ – especially as the cost of processing probate applications is expected to fall after the introduction of a more efficient online process.
Probate currently costs the Ministry of Justice around £40 million to run, but these new fees will bring in around £150 million.
The rise has also been criticised by charities and legal groups who have said it could have serious consequences for those families forced to take out a loan to cover the cost of probate. This is because assets can be tied-up in bank accounts or property, with the executor of the Will struggling to pay the up-front probate fee.
Currently the cost of probate in England and Wales is a flat fixed fee, but the new charges will see probate fees calculated on a sliding scale. This means probate fees will soar to £2,500 for estates worth more than £500,000 and £6,000 for those worth more than £2m.
Despite the big hike, these fees are lower than the ones that were previously proposed which would have seen a bottom rate of £300 for estates worth between £50,000-£300,000 but climbing to £20,000 for estates worth more than £2 million. These were scrapped ahead of last year’s election after a Parliamentary committee claimed the plan to be unlawful and constituted as a new tax.
The Institute of Chartered Accountants in England and Wales (ICAEW) has agreed with the comments made by the committee. Jane Berney, ICAEW business law manager, said:
“Probate will become largely automated, not quite as simple as paying for your car tax but nevertheless all online, and currently costs £40 million to run. This drastic increase in fees is expected to raise £150m to pay for running the MoJ. As the new fees are effectively a tax on wealth, they should be subject to the right scrutiny, like any other tax.
“The possibilities available through automation for probate are ideal to make this a far less arduous task for the executor, but question needs to be asked as to whether the MoJ is abusing its constitutional powers.”
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