What is probate?
When someone dies, you need to get the legal right to deal with their property, money and possessions, and to do so you need a grant of representation, which is known as ‘probate’.
When is probate not needed?
Usually you won’t need to apply for probate if the estate does not include land, property or shares; if it is passing to a surviving spouse or civil partner because it was held in joint names (e.g. a joint bank account, or a home owned as ‘joint tenants’); or if the estate is valued at less than £15,000.
Each financial institution has its own rules, however, and may still require you to apply for a grant even if the value is under this threshold.
What is happening to probate fees?
In February 2017, the government announced that probate fees in England and Wales will change in May 2017 to a banded system, where fees increase with the value of the estate, replacing the current flat fees of £155 if you apply through a solicitor, or £215 for a personal application
The proposal to link probate fees to the value of the estate was published in February 2016 and attracted overwhelming opposition. Nonetheless, the new system has been brought in, and was confirmed in the March 2017 Budget.
The fee structure as of May will therefore be as follows:
Value of Estate New Fee
Up to £5,000 £0
£5,000 – £50,000 £0
£50,001 – £300,000 £300
£300,001 – £500,000 £785
£500,001 – £1m £3,785
£1m – £1.6m £7,785
£1.6m – £2m £12,000
Over £2m £20,000
When in May does the change kick in?
The government has not yet confirmed the exact date in May from which these changes will apply. The new fees will apply to all applications received by the probate service on or after this still-to-be-announced date in May, irrespective of the date of death. Probate registries have said that any application received within working hours of the Probate Registry before the implementation date will be charged the current fee.
What can you do?
Applying for probate takes time as you need to gather a number of documents and all the relevant information regarding the value of the estate to ensure any inheritance tax obligations are correctly accounted for. If you are very recently bereaved it may therefore be very difficult to submit a full application for probate before the new fees are implemented.
If, however, you have already started the process, you may want to try and get your probate application in before May to ensure you pay the current flat fee.
If you are applying for probate through a solicitor, your solicitor will be aware of the situation and will be doing everything they can to try to get your probate application lodged with the probate registry before the new fee structure applies.
If you are making a personal application, you should be aware of a few important points:
In cases where you are required to submit an IHT400 or any document for assessment by HMRC for inheritance tax purposes, many probate registries have said that it is possible for you to submit the appropriate forms to both HMRC and HMCTS Probate simultaneously. They will not issue your grant until the approved IHT421 is received, but the probate registry will mark your application as lodged. To assist them in not raising this as a query, they have advised that you clearly mark on your application that the inheritance tax document will follow after assessment.
A ‘full application’ for probate purposes, and therefore to qualify for the appropriate fee, must include:
Full oath sworn by all deponents and commissioners
An original will and codicil (where appropriate) endorsed by all commissioners and deponents
The appropriate number of correct copy wills and codicils
An Inland Revenue account (with the exception of IHT400s/421s where assessment is ongoing and it has been noted on the covering letter that it will follow)
All associated documents including any affidavit evidence required at the time of submission, renunciations, powers of attorney
The appropriate fee.
Upon receipt of an application in this form prior to commencement then the existing fee will be charged.
If the estate you are dealing with is asset rich but cash poor, the probate registries have said that executors will be able to apply to the Probate Service to access a particular asset for the sole purpose of paying the fee. Instalment options will not be available.