Stone King lawyers warn over ‘stealth tax’ on Bath families from probate changes

March 15, 2017

Experts in the Bath office of law firm Stone King are warning that big increases in probate fees will hit local families particularly hard due to the city’s high property values.

The Ministry of Justice has announced plans to increase the fees payable after death from May which could leave beneficiaries of the most valuable estates paying up to £20,000.

The court fees for obtaining a grant of representation – which gives executors the right to deal with a deceased person’s assets – are currently fixed at either £155 or £215.

But Kerry Rogers, pictured, a solicitor in Stone King’s trusts and estates team, says the changes will trigger significant increases in fees for estates above the new £50,000 threshold.

“The changes are likely to have a considerable impact on families in Bath, where property is more expensive than in many other areas,” she said. “If a property value exceeds £500,000, for example, this would incur probate fees of £4,000 upwards under the proposals.

“These increased fees will have to be paid before a grant of representation can be issued. But if there’s not enough cash available to pay these fees then relatives will need to find other ways to pay.

“This could include beneficiaries having to fund the fees themselves – and later reclaiming them from the estate – or taking out a bridging loan. This could cause financial difficulty and, in cases where the only real asset is the deceased’s property, could result in the house having to be sold.”

Kerry said another major concern was that these changes could leave some people open to pressure to place assets into trust or to transfer them before they die in order to avoid higher probate fees. Some older people may even feel pressured into giving away assets to avoid the charges.

“In some circumstances it may be appropriate for trusts to be created or assets to be transferred, but this should only be done after careful consideration of all of the pros and cons,” she said, adding that the planned fee increases were simply a cash-finding exercise to pay for the country’s court and tribunal system.

“In the majority of cases, whether the estate is worth £50,000 or £2m, there will be no difference in the amount of work involved for the probate registry. This makes the banded fee structure unfair and more of a ‘stealth tax’ on families who may be asset-rich but are cash-poor,” she said.



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