Midlands lawyer Gary Priest says probate fees rise is an ‘outrageous stealth tax’.
A hike in court fees that leaves relatives facing thousands of pounds worth of bills is an “outrageous stealth tax”, a leading Midlands lawyer says.
Gary Priest, a partner at law firm mfg Solicitors, has reacted after the Government ploughed ahead with controversial changes to probate fees, scrapping the simple fixed fees in favour of a sliding scale.
The new arrangements, which come into force in May, have been rubber stamped despite fewer than 2% of people being in favour in the official consultation.
Those inheriting less than £50,000 will no longer pay any fees, however the current fixed fee of £155 or £215 will jump to £1,000 for estates worth between £300,000 and £500,000, with scaling fees of £20,000 for estates valued over £2 million.
The respected tax specialist Mr Priest said the Ministry of Justice had now created “a new form of Inheritance Tax by another name”.
“The amount of work for the Probate Registry is the same, regardless of how big or small the estate,” Mr Priest said. “That means this is nothing more than an outrageous stealth tax, effectively just a different kind of Inheritance Tax.”
Mr Priest had joined calls from across the legal profession last year for the Ministry of Justice to think again. He had warned that inheritors would face cash flow problems because the fees would have to be paid up front.
Mr Priest added: “The idea was meant to have been sold to people on the basis that removing the fees for lower value estates was fair. Yet the scale of the increase for larger estates is completely unjustifiable.
“All that this is going to do is lead people to transfer more valuable properties into joint names with their children so they can avoid the probate process altogether.
“That can have very nasty consequences as it can compromise people’s financial security and even increase capital gains tax when the property is sold.
“Another option is to set up a probate trust which gives beneficiaries quick access to funds when a person dies. This way the owner has a right to live in the property, but while it saves on court fees, it won’t save on inheritance tax.
“Anyone thinking about the estate they will leave for their loved ones needs to be properly advised so they do not find themselves penalised either by these unfair new fees, or by taxes they might otherwise have not been under any obligation to pay.”
by Solicitor Gary Priest
Based in Worcestershire and Shropshire, mfg Solicitors provide a balanced portfolio of commercial, agricultural and private client services – www.mfgsolicitors.com
Steep Rise in Probate Fees https://t.co/CeB57JakoU
— LandlordZONE (@LandlordZONE) March 21, 2017