News & insights
Probate changes will hit region’s landowners and farmers
16th March 2017
Latimer Hinks Solicitors is warning that upcoming changes to probate fees are a ‘stealth tax’ and will leave many people in the region out of pocket.
Obtaining a Grant of Probate, or letters of administration if there is no will, is the process by which executors secure the authority to deal with the property, investments and money of someone who has died
From May 2017 the way probate fees are charged will change to use a banded system based on the value of the deceased’s estate, moving away from the current flat fee of £215 for private applications (or £155 when a solicitor handles the process). The changes mean a charge of up to £20,000 will be made before Probate is granted and before assets can be released. £20,000 will be charged for estates over £2M, £12,000 will be charged for estates of between £1.6 and £2M.
Latimer Hinks’ Chief Executive Anne Elliott believes the changes are unfair. She said: “These changes, which are already attracting media and political criticism, are all well and good for people with large bank balances, but for people who are ‘asset-rich but cash-poor’ as is often the case, particularly in the North East, these changes are an unfair financial burden.
“This could well hit the landowning and farming community in the region particularly hard. A farm may easily be worth in excess of £2million on paper, but finding £20,000 in cash to pay Probate fees could be problematic. For Inheritance Tax purposes the farm could well be exempt from tax but now there will be what amounts to another tax. Some clients may need to take, extend or increase loans to cover the fees.”
Anne also questioned the reasoning behind the changes: “Ultimately the service delivered by the Probate Registry is the same whether it is an estate valued at £10,000 or £1million, so why should the cost be any different? It just adds to the cost of our already immensely complex system of taxation.”
Anne Elliott (TEP)