Arnison Estate Agents
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Expert representation for over 150 years.
Appleby: 01768 351591
Penrith: 01768 862007

The New Death Tax

Recently the government has decided to radically change the fees payable for a Grant of Probate.  At the moment where you instruct a Solicitor to prepare the paperwork, the fee the Probate Registry charge is £155.00, regardless of the size of the Estate.  Whilst the proposals mean that Estates worth less than £50,000 will not pay a fee at all, for an Estate worth between £50,000 and £300,000 the fee has almost doubled to £300.00.  The fees rise dramatically for Estates worth over £300,000 and a fee is now payable of £1,000.  Estates worth over £500,000 will pay £4,000.  For Estates worth over £2,000,000 the fees are now increased to a huge £20,000.  Whilst some of those values may be appear to be large Estates, they would include the value of any land and the Deceased’s home.  The fees apply irrespective of who inherits the Estate, unlike Inheritance Tax, so widows and charities will pay under the new regime.

There is no difference in the amount of work that the Probate Registry will have to undertake to process a Grant for £200,000 or £800,000 and yet the fees will be £3,700 more.  The Probate Registry’s most expensive fee will be 66 times its cheapest fee.  By comparison, the Land Registry’s most expensive fee for registering an unregistered property is only 22 times more expensive than its cheapest fee.  This is, therefore, just another form of death duty without any real justification.  Like Inheritance Tax, it will need paying upfront.  The government’s paper mentions the fact that executors or beneficiaries may need to loan the Estate the money necessary to pay the fees.  This is commonly the case now, but of course loaning £155.00 is totally different to loaning £4,000.  We believe this will result in real hardship, particularly where people are asset rich but cash poor. 

There may be, of course, the temptation to avoid applying for a Grant of Probate altogether.   This may well lead people in to making very unwise decisions with regard to their Assets and Estate Planning, such as inappropriate use of Trusts, or placing assets into joint names.  This in itself may then actually reduce the amount of tax paid through Inheritance Tax, thereby damaging the government’s finances still further.  We believe that parliament should reject this regressive tax by the back-door and return to the drawing board.  Many others agree and a petition is already up and running.  If you, like us, believe that these fees are unfair and simply are tax on death, please add your name to the thousands who have already signed the petition.  Please find the link below.

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