The Government is pressing ahead with plans to substantially increase the cost to bereaved families of settling the estates of deceased relatives, so much so that critics have dubbed it the ‘death tax’.
Currently, most people pay a fixed fee of £155 for applications made by a solicitor (and £215 if it is made by an individual) for a court order giving executors the legal authority to administer the assets in an estate. Any estate worth £5,000 or less is exempt from paying a fee.
The new proposals will abolish the flat fee and will be based on the value of the estate, but will apply only to estates worth £50,000 or more. Fees will range from £250 to £6,000 – with the highest fees charged on estates over £2 million.
Executors will have to pay the fee up front before reclaiming it from the estate once probate has been granted – which could leave them forced to take out a bank loan to cover the initial costs.
We reported last year that the new tax was due with effect from May 2017, but a number of concerns were raised at the time, delaying its. In a statement on Monday, the Government said: We have listened to these very carefully, and under today’s proposal we have revised fees so they will never be more than 0.5% of the value of the estate.
The Daily Mail reports that the new regime is expected to raise £170 million.
MPs have until the end of the month to consider the implications, and could force a vote when it comes before the House of Commons.