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Probate fees hike from April 2019: will you face a bill for thousands?
Families could be hit with huge bills after a loved one passes away, under changes to probate fees currently before parliament - though some estates will pay nothing at all.
Probate is the authorisation you need to apply for after someone dies, to give you the power to manage their estate.
Under the proposed shake-up, the fees will be tiered, so that some families will pay nothing, but others could face bills for thousands of pounds - a huge increase from the £215 flat fee currently in place.
Final approval of the new probate fees has been delayed due to parliamentary Brexit negotiations. Once parliament gives its final approval, the new fees schedule will begin 21 days later - meaning it's unlikely anyone will pay under the new system before May.
We explain how the fees work and what you need to do if you're the executor of an estate.
How much will you pay in probate fees?
Currently, everyone pays £215 to apply for a grant of probate or £155 to apply through a solicitor. This is only waived if the estate is worth less than £5,000.
In future, the fees you pay will depend on the size of the estate left behind. You can see the full set of proposed fees below.
| Size of estate (before inheritance tax) | Proposed fees |
|---|---|
| Up to £50,000 | £0 |
| £50,001 - £300,000 | £250 |
| £300,001 - £500,000 | £750 |
| £500,001 - £1,000,000 | £2,500 |
| £1,000,001 - £1,600,000 | £4,000 |
| £1,600,001 - £2,000,000 | £5,000 |
| £2,000,000 + | £6,000 |
This is great news if the estate is fairly modest - you won't pay anything if the total value is less than £50,000. Around 25,000 estates are likely to benefit from this change, according to government estimates.
In total, 80% of estates will end up paying less than £750 (meaning the estate is worth less than half a million pounds), and 60% will pay a similar fee to the current scheme, the government found.
However, if the estate is worth more than £500,000, the fees rapidly increase, and the largest estates - those worth more than £2m - could pay up to £6,000.
These changes only apply in England and Wales. You'll continue to pay a flat rate of £220 in Northern Ireland and £200 in Scotland.
Can you beat the price hike?
Though originally scheduled for 1 April, it's not clear when the new fees will kick in. The rules are currently awaiting a final tick of approval from parliament. Twenty-one days after Royal Assent is given, the law will come into effect.
If you're currently dealing with an estate worth more than £50,000, it's worth making your application as soon as possible before the fees go up.
Normally, if there's any inheritance tax to pay, you'd need to wait until HMRC has processed your inheritance tax account before you can file a probate application. However, as a temporary measure to speed up filing, probate registries will now accept applications without the inheritance tax forms (just make sure you include a note to say the forms will follow).
Keep in mind that many other people may also be rushing to beat the clock, so it's worth checking how busy your solicitor is and whether your application will be submitted in time.
As of last year, you can also apply online for probate, as long as the deceased left a will and there are less than four executors. If your estate is relatively straightforward, this may help you beat the queues and avoid using a solicitor altogether.
You can find out more in our step-by-step guide to applying for a grant of probate.
- Need help with probate?Download our free checklist from the experts in our legal advice service to help you through the process.
Who pays probate fees?
Paying for probate fees can be tricky, and could be even trickier when the fees soar.
As a general rule, you can use funds from the estate to cover any costs of administering the will and tidying up the deceased's affairs - but you'll need a grant of probate to access this money.
The application fees are payable before a grant of probate is given, so you may need to pay upfront and then be reimbursed from the estate afterward.
If you're struggling to cover the fee out of pocket, you can ask the deceased's bank to release money in advance. If your bank or building society refuses, the probate service may be willing to contact them on your behalf.
You may also be able to apply for a limited grant of probate, which would give you just enough access for the fees to be released to you.
You can use this gov.uk link to find your nearest probate registry to find out more.
- Find out more: everything you need to know about DIY probate
What does this mean for inheritance tax?
You have to estimate and report the value of your estate to HMRC before you apply for probate. That means probate fees won't be deducted from your estate for inheritance tax purposes.
Similarly, the probate fees will be based on your estate before tax is paid.
So, for example, if the estate is worth £700,000, you'd pay inheritance tax on the full amount (minus your tax-free allowances), and probate fees of £2,500.
- Find out more:inheritance tax rates and allowances
What else is changing in April?
Aside from probate fees, there are a few other changes that will impact on executors and estates in the 2019-20 tax year.
The 6 April brings an increase in the amount that can be inherited tax-free when passing an estate includes your main home.
If the home is inherited by a direct descendant - so, a child or grandchild - the estate will benefit from an additional £150,000 tax-free allowance. This is in addition to the £325,000 allowance for all estates.
All up, your heirs can inherit up to £475,000 tax-free in 2019-20 - or up to £950,000 for married couples and civil partners.
You can use our inheritance tax calculator to work out how much your or your loved one's estate is likely to be taxed.
