Following the announcement of the snap general election, the government decided to scrap its plans to increase the legal fees due after a person has died. Having proposed a rise in probate fees in England and Wales to come into effect in May, which would have seen an increase from the current flat figures of £155 or £215 to as much as £20,000 for the most valuable estates, the Ministry of Justice announced in the second half of April that there was too little time for the legislation to go through parliament before the election.
The scrapping of the fees increase will be a welcome turn of events for many critics who had described the move as introducing a ‘stealth death tax’. However, any celebrations might prove premature, as plans may be brought back once the election dust has settled.
When a person dies, the executor of their estate has to pay probate charges to the government in order to be able to distribute assets to the relevant beneficiaries of their will. The current system sees a fee of £215 due, which is reduced to £155 if the process is completed by a solicitor, no matter what the value of the estate is.
The proposed changes were to bring in a sliding scale. Estates valued under £50,000 would pay no fees, with estates worth between £50,000 and £300,000 paying a charge of £300. The figure would then have increased as the estate value went up, with estates worth over £2 million being charged the proposed new maximum fee of £20,000, a figure which would have meant an increase of 9,000% on the current fees.
While plans for this new system have been shelved for the time being, don’t be surprised if they resurface at a later date as the changes would have raised an extra £300 million a year for the government.
What this continues to highlight is the need for Whole of Life financial planning, looking not just at pensions or investments but all planning aspects in a holistic way so that you and your loved ones are as protected as possible in all circumstances. We pride ourselves in delivering this form of advice to our clients and so if you feel that your plans need reviewing, or you’ve never used our services before but feel you would benefit from such a conversation, then please contact your Creative Financial Planner or contact us on info@creativewm.co.uk.
Sources
https://www.bbc.co.uk/news/uk-politics-39663204
https://www.telegraph.co.uk/tax/news/probate-fee-fiasco-always-tax-not-fee/