Probate lawyers have welcomed the government’s decision to drop its plans to hike probate court fees from £155 to as much as £20,000 for larger estates.
The proposal, first announced in February 2016, would have increased the fee from £155 (if done by a solicitor) or £215 (without a solicitor) to a figure on a sliding scale of between £300 and £20,000, depending on the size of the estate. It was to raise about £300m for the courts and tribunals. However, the proposal came under fire from practitioners, professional bodies, charities, judges and members of the public, with probate lawyers arguing it would no longer be a fee for managing an administrative process but a tax on a person’s wealth at death.
Further doubt was cast by cross-party MPs serving on the joint committee on statutory instruments, who suggested in a report last month that the increase could be ultra vires and therefore unlawful, as well as making an unexpected use of the power conferred by the enabling Act.
The proposal has now been abandoned ahead of the June General Election.
Russell-Cooke senior partner, John Gould, who has been advising the Society of Trust and Estate Practitioners (STEP) in relation to the legality of the government’s proposed increases, said: “A key question was whether the charge was legally a fee or actually taxation.
“Our advice was that the charge was in substance taxation. This mattered because the government was proposing to introduce the fee without legislation. It is a long established constitutional principle that taxation can only be imposed by an Act of Parliament.”
Rebecca Fisher, partner at Russell-Cooke, said: “Given many had considered this was an inheritance tax by the back door it is unsurprising this has been taken off the agenda prior to the General Election. That said I think it will be highly likely that we will see a rise in the probate fees in the future but it remains to be seen whether these will be linked to the value of the estate.”
Alison Lloyd, associate chartered legal executive, Moore Blatch Solicitors, said: “We hope that it is not part of the Tory Party manifesto, and that if it is, then it should not be positioned as an administrative fee but a tax on a person’s estate.
“I have managed hundreds of probate cases and while it is often true that larger estates do require more work, to suggest that the work is always commensurate with the value, or that it is 130 times as much work, is nonsense.”
Elis Gomer, barrister, St John's Buildings, said: “The idea that a significant increase in probate fees should be used to cross-subsidise the rest of the justice system was profoundly unfair and it is deeply troubling that the Ministry of Justice have indicated that they believe that this was not only appropriate but that it should be introduced despite the virtually unanimous condemnation of the policy by professionals. We can only hope that the delay in introducing this scheme will lead to practitioners’ concerns being addressed.”
The Law Society also welcomed the news, with Law Society president Robert Bourns noting that the proposals would have affected 42% of estates.
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