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Probate Court Fees

Beneficiaries of estates worth more than £2 million could be hit with a rise in probate fees from £215 to £20,000 in a move to shift the burden from the middle classes to “the very wealthiest”.

In plans aimed at removing 30,000 estates a year from probate fees, the Ministry of Justice has proposed a comprehensive overhaul of the levy.

The proposals will raise an extra £250 million a year for the Treasury which is a “critical contribution to cutting the deficit” and “reducing the burden on the taxpayer of running the courts and tribunals”.

In a letter to Robert Neill, the chairman of the House of Commons justice select committee, Shailesh Vara, the justice minister, said that he also wanted to “see a simpler, more streamlined process for probate applications”.

He said that the planned restructuring was “progressive, with lower value estates lifted out of paying any fee at all and other estates only paying more as the value of the estate increases”.

Currently, all estates valued at more than £5,000 incur a flat rate probate fee of £155 if made by a solicitor and £215 if paid by an individual beneficiary.

The government wants to raise the minimum threshold to £50,000, a move it claims that would result in 57 per cent of UK estates incurring no fee at all.

At the same time estates valued at between £50,000 and £300,000 would incur a fee of £300, slightly up on the current fee of £215. Fees would rise gradually on estates valued between £300,000 to £2 million, peaking at £1,000.

The biggest fees will be payable on estates valued at more than £2 million — which in the south east could hit middle-class beneficiaries of relatively large family homes — which will rise to £20,000. Mr Vara said that the fee would never exceed 1 per cent of the value of the estate and that in many cases it would be considerably less.

Dora Clarke, a probate partner at Withers, a London law firm, described the fee increases for the largest estates as “off the Richter scale”.

She said: “The rises are fair enough at the lower end, but such a dramatic increase at the higher end will simply drive people towards taking legal measures to avoid paying the fees.”

Increasing the amount of gifts in later life and placing large amounts of assets in trusts are legitimate ways of avoiding probate fees. Assets held abroad are also exempted.

Ms Clarke also described the current service provided by the Probate Registry as being “in complete disarray”. She said: “There is no way it would be worth a fee of £20,000.”

Mr Vara acknowledged that court fees “are never popular”. However, he said that “they are necessary if we are, as a nation, to live within our means”.

He added that the probate service would also move from a paper-based to an online system, to make the “probate service much easier to navigate, so the experience of the bereaved is as simple and hassle-free as possible”.

In his letter Mr Vara says that the courts and tribunals service cost £1.8 billion in 2014-15 but only £700 million was received in income. That leaves a net cost to the taxpayer of some £1.1 billion in one year alone, he said.

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