Hike in probate fees is a ‘stealth tax’, says lawyers RWK Goodman
Grieving families are to be hit with increased probate fees as the Government has given the green light to the controversial hike in new fees on the administration of estates.
Probate fees are currently a flat £215 irrespective of the size of the estate, but from April 2019 will increase to as much as £6,000 for estates valued at over £2m.
Edward Vidnes, a partner in the Private Client team at law firm RWK Goodman said: “This does have the appearance of a stealth tax given that no greater amount of work is required by the Probate Court as the size of the estate increases.
“We do have real concerns over how this fee, which needs to be paid up front, will be funded, particularly in the situation where an individual has been able to hold on to their home to pass on to their children – as encouraged by the government – to the detriment of cash in their estate.
“It is very difficult to obtain loans to fund the costs associated with the administration of an estate, and it is easy to see lenders taking advantage of this with high interest rates.”
Edward adds: “We also have significant concerns around people being encouraged to place their properties in trust during their lives to avoid such fees without fully understanding or being properly advised of the consequences. These might include a loss of control once their home is placed in the hands of others and if they continue to live there, the impact this might have on their estate’s future inheritance tax liability. Individuals should always take professional advice before taking such a step.”