A consultation paper has been issued by The Ministry of Justice (MoJ) proposing the reform of court application fees for Grants of Probate in England and Wales.
The current court fee is £155 if made by a solicitor and £215 if made by an individual justified by the additional work required by the Court when dealing with an individual's application.
The proposal is to discard the flat fee system and introduce fees proportionate, and rising with, the value of the estate being administered.
Presently, there is no fee payable for an estate valued up to £5,000 and it is proposed that this exemption will be increased for estates up to the value of £50,000. The government estimates that this will exclude an additional 30,000 estates from paying the application fee. However, the proposals could mean that:
- an application fee of £300 would apply to an estate with a value of between £50,000 and £300,000;
- an application fee of £1,000 would apply to an estate worth £300,000 to £500,000;
- an application fee of £4,000 would be payable for an estate worth between £500,000 to £1m;
- a fee of £20,000 would be required for an estate worth £2m or more.
The government is also considering whether grant of probate applications fees should be excluded from the fee remission scheme.
The government assesses that these changes will provide an additional revenue of £250m, which in turn will reduce the deficit and the burden on the taxpayer. The courts and tribunals administration cost £1.8 billion in 2014/2015 with an income of only £700m being received.
In practical terms, the personal representative (executor/administrator) is responsible for payment of the grant application fee and the most common method is to access funds from the deceased's bank account. Banks already permit the release of funeral costs, probate fees and inheritance tax prior to the grant of probate being obtained. However, there may be limited cash funds available in a deceased's estate with the main asset being the property. This could be problematic for executors dealing with the administration and who do not have the requisite cash available to pay the application fee prior to liquidation of the assets. In these cases, where there is insufficient funds, the government is advising that the personal representative apply to a bank for a bridging loan to finance the payment of the application fee, using the estate assets as security.
The MoJ is encouraging feedback on the consultation paper and, therefore, developments on this issue will be of interest in future months.
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