General Election call stalls death tax hike
The unpopular new ‘death tax’ charging structure was due to come into force from May, requiring some bereaved families to shell out as much as £20,000 to deal with their loved one’s estate. This was a huge leap from the current flat rate of £215 or £155 if using a solicitor.
However, the Ministry of Justice has confirmed that as the Prime Minister Theresa May has called for a General Election to take place on 8 June, there is insufficient time to pass the legislation before polling day.
Instead it will be temporarily shelved where it will be left to the next government to decide whether the hike will continue.
Tim Venner, head of business development – financial planning at Charles Stanley, said: “We welcome the government’s decision to postpone their proposals to introduce increased probate fees and would welcome the government dropping their proposals all together. The increased fees are nothing more than a wealth tax for the bereaved and are disguised as fees.”
Tom Lawrence, director in the estates team at Howes Percival, said, “The news will come as welcome relief for many and certainly now removes the recent pressure placed on a number of grieving families to try and obtain Probate more quickly, to secure the current lower application fees. I would expect the outcome of the general election to have a significant bearing as to when the proposals receive attention once again.”
The probate fee hike would have seen the government scrapping the flat fee system and replacing it with a tiered structure which will increase in line with the value of the estate, up to a maximum of £20,000.
It also planned to raise the fee threshold from £5,000 to £50,000. When the new rules were announced in March, the government said raising the zero-fee band to £50,000 would lift 25,000 estates out of paying any fee – 57% of all estates.