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Probate Fees Update

View profile for Gregory John
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Guidance has now been provided by the Probate Registries relating to the practical implementation of the increase in probate fees announced by the Ministry of Justice on the 24th February 2017.

All applications received by the registries by the start date in May 2017 will be processed under the old fee structure.  It should be noted, however, that while we expect a start date of early May 2017, no actual commencement date has yet been announced.

For applications requiring a receipt from HMRC, known as the IHT421 Probate Summary, the application may be lodged and therefore fall under the old fee structure with a note that the Probate Summary is to follow.

This is an important change to the current process whereby the Grant application is not sent to the Registry until the IHT421 has been received from HMRC but means that estates will not fall under the new fee structure simply due to delays by HMRC or the Registry as a result of the increase in the volume of applications expected in the lead up to the change.

Some clarity has also been issued regarding the calculation of the net value of the estate for the purposes of the fee calculation. 

The total net value of the estate will be the assets of the estate less any liabilities.  This will exclude joint assets (but not those held as tenants in common, for example, a property) but will even include any property eligible for inheritance tax reliefs such as spouse exemption or business property relief.

This means that estates which are exempt from inheritance tax, such as those passing in full to a surviving spouse, will still have to pay the probate fee based on the net value of the estate.

If you feel you could be affected by the new fee structure or wish to discuss your current Inheritance Tax position, please feel free to call us on 01245 228127.

This is not legal advice; it is intended to provide information of general interest about current legal issues.