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Death tax hike: government treating bereaved families as ‘a nice little earner’

Written by: Paloma Kubiak
The imminent hike to probate fees has been described as 'a backdoor way of raising money' after the government admitted it did not know how much it costs to process a single probate application. 

The new ‘death tax’ charging structure, due to come into force from May, will require some bereaved families to shell out as much as £20,000 to deal with their loved one’s estate.

But a Freedom of Information request by insurance giant Royal London revealed the Ministry of Justice (MoJ) did not know the average cost of handling a probate application or the cost of handling applications broken down by the size of estate.

Royal London said this confirmed that the new rates do not relate to the cost of providing the service, but were ‘simply a revenue raising measure’.

Director of policy at Royal London, Steve Webb, said: “The government is treating bereaved families as if they were a ‘nice little earner’. It is one thing to make a reasonable charge for the provision of a public service. But the MOJ has now admitted it does not know the unit cost of handling a probate application and sees no reason to find out what it is.

“This is clear evidence that the new charging structures are nothing to do with recovering the reasonable cost of processing probate applications and are simply a backdoor way of raising money from people in their time of greatest need. The government should think again before going ahead with this tax hike on bereaved families.”

At the moment, probate fees are a flat £215 or £155 if using a solicitor.

From May, the government is 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 is also raising the fee threshold from £5,000 to £50,000.

An MOJ spokesperson, said: “Our plans to introduce new probate fees remain unchanged. We will introduce a fairer system, meaning over half of estates pay nothing and over 90% pay £1,000 or less.

“They will be considered in Parliament after Easter, and come into force as soon as possible.”

The rising cost of probate

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.

The changes come despite a consultation which saw just 13 of the 831 responses agree with the government’s proposed fee structure.

YM EstateValue

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