According to rural accountant Old Mill, the Government proposed the new fees in 2017 – but considerable negative feedback led it to shelve its plans. It is now seeking to bring in lower fees than originally tabled within a new statutory instrument – but they are still massively higher than the existing structure.
“Currently, executors of an estate worth £5,000 or more have to pay between £155 and £215 in probate fees, for which the court grants them authority to deal with the deceased’s estate,” explains director of rural services Paul Neate. “Under the new proposal, probate for any estate worth less than £50,000 will be free, but above that threshold the costs really ramp up.”
For example, the fees for an estate worth between £500,000 and £1m will increase to £2,500, rising to £4,000 for assets worth over £1m and £6,000 for assets worth more than £2m. “These are entirely disproportionate fees for the court costs of issuing a Grant of Representation” says Mr Neate. “It is just Inheritance Tax under another name, which the Government is trying to sneak in through the back door.”
Mr Neate suggests that house and land owners lobby their MP to prevent the new fees being brought in. “Nobody minds paying a fair contribution to administration fees, but this is a huge burden to add to a family when they are dealing with the death of a loved one. Having to find up to £6,000 in advance could be crippling. As an executor you can’t deal with the assets on an estate until you’ve obtained the grant, so you’re stuck between a rock and a hard place.”
An executor can reclaim the fees from the deceased’s estate after probate is granted, but this reduces the cash available to the beneficiaries and could result in them having to sell assets just to release the cash, he adds. The fees apply to each death, so after inheriting assets from a spouse the death of the survivor can double the costs to potentially £12,000 for a couple.
“Farmers are often asset-rich but cash-poor, so they will be hit particularly hard by these new fees,” warns Mr Neate. “I’d urge anyone who is likely to be affected to lobby their MP to prevent these unfair charges being brought in.”
- For more information contact Paul Neate on 01225 701224.
About Old Mill
Old Mill Accountants and Financial Planners employ over 300 staff in four West Country locations. The Rural Services teams are headed by Andrew Vickery, with offices in Yeovil, Wells, Exeter and Melksham. Looking after over 1,200 farmers they are one of the leading specialist farm accountants, and are happy to help with any financial and tax-related enquiries from the media.
For more information contact:
Ben Carter, Rural Sector Partner. Tel: 07825 620052 or e-mail: [email protected]uk