Last week the government published the response to its consultation on reforming the current regime of fixed fees for non-contentious probate applications, probate court fees to you and me. This is the fee that must be paid when an application is made for a grant of representation. A grant is required to prove the authority of those entitled to act as personal representatives (executors or administrators) and administer the estate. This proof establishes the personal representatives’ title to the assets of the estate, so enabling them to collect in and deal with those assets. The fixed fee is currently either £155, if the application is made by a solicitor, or £215 for a personal application. There is no fee for estates worth £5,000 or less.
The proposal is that from May 2017 a banded fee structure will be introduced linked to the value of the deceased’s estate. Estates below £50,000 will be exempt from the probate application fee but the relief that allowed certain individuals to be exempt from the fee will be removed. Exceptional fee remissions may still be granted at the Lord Chancellor’s discretion.
The proposed fees are:
Value of Estate (before Inheritance Tax) Proposed Fee
|Up to £50,000 or exempt from requiring a grant of probate||0|
|Exceeds £50,000 but does not exceed £300,000||300|
|Exceeds £300,000 but does not exceed £500,000||1,000|
|Exceeds £500,000 but does not exceed £1m||4,000|
|Exceeds £1m but does not exceed £1.6m||8,000|
|Exceeds £1.6m but does not exceed £2m||12,000|
The fee must be paid at the time the application for the grant is made. The government believes that the standard ways that executors will pay the fee include using:
- Cash in the deceased’s estate if it will be released by the deceased’s bank or building society. The BBA and the BSA have both agreed to produce guidance for executors applying for probate.
- Personal assets of the executor
- Assistance from beneficiaries of the estate.
- A loan (depending on the executor’s credit rating).
- Solicitors appointed to act on the executors’ behalf.
- An alternative executor named in the Will who may have adequate funds available or a better credit rating.
Those using options 2-6 will be reimbursed by the estate once it has received sufficient cash funds to do so. Depending on the assets in the estate this could take several months e.g. asset rich, cash poor estate may require a house to be sold before funds are available.
The changes represent a significant increase in court fees and were opposed to by the majority of respondents to the consultation. The government however considers them to be necessary for the courts and tribunal system to continue to provide access to justice in the long term.
We are here to make estate administration as straightforward as possible. Please do contact a member of the Greenwoods Private Client team on 01733 887700 if you have any queries.