Probate fee fiasco: it was always a tax, not a fee

Secretary of State for Justice Elizabeth Truss departs 10 Downing Street 
Secretary of State for Justice Elizabeth Truss' plans for new probate fees were widely criticised  Credit:  Christopher Furlong/ Getty Images Europe

Changes to probate fees have been scrapped. The Government confirmed today that the controversial charges have been dropped, at least until after the general election and the next Government.

The Ministry of Justice, the department responsible, said the scrapping is due a timing issue - it can’t get the legislation through in time before parliament closes ahead of the election.

But this widely-opposed rule change should be called what it is - a tax and not a fee.

The plans were to change the current, relatively nominal, probate charge of £215 (or £155 if a solicitor completes the process) up to a maximum of £20,000.

Estates below £50,000 would pay nothing at all, but all estates worth more would be forced to pay increased fees.

If the estate is up to £300,000 it will cost £300, while those estates worth more than £1m would pay £8,000 and those above £2m would face a whopping £20,000 fee. This latter band is an eye-watering 9,000pc increase on the current rate.

The new slab process also meant those who found themselves unlucky enough to be £1 over an allocated band would face the next highest rate. The changes would cost the public another £300m a year.

But the Government claimed this was a fee, not a new tax. In doing so it meant the rules had a different passage through parliament, and dodged the higher level of scrutiny that tax changes receive.

To be a fee the MoJ would have to know that processing probate for an estate of £2m would cost in the region of £20,000. But it couldn’t.

Instead, the Ministry of Justice admitted it didn’t actually know the cost to the public purse of processing probate.

A Freedom of Information request to the MoJ found that the department could not state the average cost to the Government of processing probate applications - let alone that it increased with the size of estate.

These probate fee changes had faced great opposition from the start. In a public consultation on the plans, of the 831 responses just 13 agreed with the proposals.

Objections came mostly from law firms and accountants, but also individuals – including readers of Your Money.

After the Government pressed on with the plans, a committee of MPs also challenged the increase in Parliament, saying the Government was acting beyond its remit.

It said that the new charges "appear... to have the hallmarks of taxes rather than fees", adding that they were "disproportionate to the service provided by the Probate Registry".

Government officials won’t confirm whether this stealth death tax has been scrapped forever, only saying it's an issue for the next government. Let’s hope it’s the last we hear of the fiasco.

 

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