Delays of up to 12 weeks as probate moves online

Since the introduction of the new online system, grants of probate are taking up to twelve weeks to finalise. When comparing this with the usual ten day turn around, it can’t be deemed entirely successful.

This issue comes as higher probate fees are soon to be introduced, with many people concerned that the new system will not be able to keep up as people rush to apply before the fee hike.

Teething problems causing delays

Previously all probate applications have been assessed manually. The new system was intended to streamline this process, making things quicker and easier for bereaved families. Around 30% of probate applications are now made online.

There appear to be two causes to the delays: Firstly, there is a rush to apply for probate before higher fees are introduced, meaning the system is dealing with more applications. Secondly, the error rate for applications has increased to 74%. When an application for probate is submitted with inaccuracies it cannot be used, so the applicant must start afresh at the back of the queue.

Although the delays are mostly due to simple teething problems, they are having a real impact on grieving families.

Many people rely on selling property to pay inheritance tax bills. Faced with an unexpected delay, families can find themselves in breach of contract, unable to legally transfer the property until probate is granted. In one such case, cited by The Times, one family became liable for a £20,000 fine issued by the Dutch government.

Understandably, some property lawyers are advising people to delay property deals until they are certain they have probate.

Concerns over automated will verification

As part of the probate process overhaul verification of wills is being automated, delegating the task of detecting falsified or altered wills to computers.

Critics point to the high error rate of the new online application system and worry that the private bulk scanning firm Exela won’t be able to match the levels of scrutiny currently used by experienced civil servants.

In response, the HM Courts and Tribunal spokesperson said: “The validity of the will is still checked by HM Courts and Tribunal Service and the added counter measures including holograms, digital seals, and digital signatures make cheating the system even harder.”

In the meantime, inheritance professionals are recommending people with high value or complex estates continue to seek guidance from probate specialists.

Speaking earlier this week Nyman Libson Paul’s Joel Weitzman said “The delays are very frustrating for Executors of Wills and beneficiaries. Many people rely on funds from property sales to pay Inheritance Tax and they can’t sell the property until probate has been granted. If Inheritance Tax is paid late interest is charged”.

We can help you get peace of mind at a difficult time. Find out more about our probate services.

Research suggests 70% of individuals ‘unaware of inheritance tax nil-rate band’

Research carried out by Canada Life has suggested that a significant amount of individuals ‘do not know the threshold’ for the standard inheritance tax (IHT) nil-rate band.

Canada Life found that 70% of those surveyed did not know the standard nil-rate band threshold, which currently sits at £325,000.

55% of those questioned do not know the rate at which assets above their available nil-rate band are taxed, the data also revealed.

Meanwhile, an additional 38% do not believe that their main home is liable for IHT.

Canada Life has warned that many families in the UK could face ‘unexpectedly high’ tax bills as a result.

‘There is a disturbing lack of knowledge which will undoubtedly translate into unnecessarily high inheritance tax bills,’ said Karen Stacey, Head of Distribution Services at Canada Life.

‘Unless people learn more about taxes and actively plan the future of their estate, the government is in line for a large, ongoing and often unnecessary windfall.’

We can help you to plan to minimise the IHT due on your estate – please contact us for further advice.

Chancellor commissions OTS to review inheritance tax rules

Chancellor Philip Hammond has commissioned the Office of Tax Simplification (OTS) to review the UK’s inheritance tax (IHT) regime, and outline ways in which the tax can be simplified.

In a letter to Angela Knight, Chair of the OTS, and its Tax Director, Paul Morton, the Chancellor acknowledged that the existing IHT regime is ‘particularly complex’.

He stated: ‘I would be most interested to hear any proposals you may have for simplification, to ensure that the system is fit for purpose and makes the experience of those who interact with it as smooth as possible.’

Mr Hammond suggested that the OTS’s review should focus on technical and administrative issues surrounding the tax, alongside practical issues related to estate planning and disclosure.

The review should also examine how existing gifts rules interact with the IHT system, and look at whether the current rules cause taxpayers to rethink their decisions in regard to transfers and investments, said the Chancellor in his letter.

IHT is currently charged at 40% on the proportion of an individual’s estate exceeding the ‘nil-rate band’ of £325,000. The residence nil-rate band (RNRB) also applies in addition to the nil-rate band, meaning that a family home can be passed wholly or partially tax-free on death to direct descendants, such as a child, grandchild, step-child, adopted child or fostered child.

A scoping document for the review into IHT will be published ‘in due course’, the OTS said.

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