When applying for a Grant of Representation (this is the document required to enable the Personal Representatives of the estate to deal with the deceased’s estate) the Personal Representatives are aware that there will be a court fee payable.
It is currently a manageable amount of £155 via a solicitor, £215 without the assistance of a solicitor and £0 if the value estate is under £5,000. These can be paid by an individual without too much financial hardship and it can later be reclaimed by the estate.
Following a recent Government consultation options were discussed to increase the fees charged to obtain the Grant of Representation. The new fee structure is significantly different to the current structure and is now based on the value of the deceased’s estate –
|Value of estate (before Inheritance Tax)||Proportion of Estates in England and Wales||Proposed Fee|
|Up to £50,000 (or not requiring a Grant)||58%||£0|
|Over £50,000 but under £300,000||23%||£300|
|Over £300,000 and up to £500,000||11%||£1,000|
|Over £500,000 and up to £1Million||6%||£4,000|
|Over £1Million and up to £1.6Million||1%||£8,000|
|Over £1.6Million and up to £2Million||0.3%||£12,000|
Under the new fee structure the majority of estates would not be required to pay any fees for obtaining a Grant of Representation, however –please be reminded that very few estates under £50,000 actually require a Grant of Representation so this would not have a great impact on many estates under the changes.
The greatest changes will be felt for the 23% of estates over £50,000 but under £300,000 and the 11% of estates over £300,000 but under £500,000 whereby the Probate Court Fee is significantly more than the current £155.
This would pose financial hardship on Personal Representatives should the estate not have sufficient cash assets to cover the fees (as the banks will release payment from the deceased’s bank account for the Probate Court Fee), for example if the main asset is a property. In this instance the Personal Representatives may have to seek assistance in the form of a loan to cover the fees from the deceased’s bank or in deed their own.
There are no specific details as to whether the Probate Court will permit a payment plan arrangement with the Personal Representatives with full settlement of the balance of the fee payable once the estate is in funds eg after the sale of the property. It is hoped that given these significant changes the Probate Court will be open to such an arrangement.
It appears that the fees will be chargeable on all estates where the values are in excess of £50,000 regardless of whether the estate is to be left to a surviving spouse or a charity, which would qualify for an exemption for Inheritance tax purposes.
The legal profession on a whole have been very disappointed with the changes as the fees are highly disproportionate to the work undertaken by the Probate Court. The work involved in issuing a Grant of Representation in a higher value estate does not justify the proposed cost in comparison with the work involved in an estate which does not exceed £50,000 and therefore no fee is payable.
The new fees are due to be implemented in May 2017 but there is no fixed date at present.