29 November 2018

2019 probate court fee hike is taxation by the back door

By Miranda Marshall, Director, Hayes + Storr

Adam Smith, the founder of modern economic principles and the darling of many right of centre politicians, established the three essential duties of government. In his 1776 ‘The Wealth of Nations’ he stated these to be national defence, administration of justice (law and order) and the provision of public works and the public institutions that facilitate trade.

The government’s justification for the proposed hike in probate court fees is ‘access to justice’. They argue the need to raise funds for an effective court and tribunal service. They are expecting a group of vulnerable people (the bereaved) to pay to run the court system. In doing so they are failing in their fundamental duty, as second-stated above.

In the UK we do not have ‘hypothecated taxation’; we have general taxation, national insurance and VAT. We should not be paying for public services out of fees paid by users of associated services and arguably, not by users of the service at all.  For example, those of us that pay tax, support the NHS whether or not we use it. We pay for schools, whether or not we have children.

This is a tax-raid. There is no more work for the probate court in issuing a grant of probate of a Will on a large estate than a small one. The system is exactly the same and there is no value-related element in the court’s work. 85% of estates are to be liable for the higher fees.

At present a flat fee is paid of £155, for applications through a solicitor and £215 for applications without.

Under the new sliding scale, which is proposed from April 2019, one in five families can expect to pay £2,500 in probate court fees on estates of more than £500,000. Admittedly, for estates below £50,000, where increasingly no grant of probate is needed anyway, there will be no fee at all. The increased fee could even fall on a widow continuing to live in the marital home. Estates between £50,000 and £300,000 will remain little-altered at £250, while the maximum fee of an eye-watering £6,000 will fall on estates of over £2,000,000.

It is wrong and ill-founded to expect the bereaved in England and Wales to pay the cost of upgrading the courts, when the bereaved in Scotland and Northern Ireland will not.  I doubt that we would object if the proposed increase was in line with inflation or according to the Scottish or Northern Irish scales.

Ministers backed-off the changes prior to the 2017 general election in the face of criticism but have back-tracked. It is small-comfort that the maximum fee has been cut from the 2017 proposed figure of £20,000 on estates of £2million and over.

The Brexit-embattled government was not brave enough to announce the changes in the Budget; rather they will be enacted via secondary legislation.

This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek our specific advice.

If you would like further advice on this matter please contact Miranda on 01328 710210. If you require advice on any other legal matter call 01328 863231 or email law@hayes-storr.com.

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