Given the government’s previous determination to push forward with a steep rise in probate fees, it wouldn’t be surprising to see it resurface if the Tories return to power with a dominant majority.
The government announced, last month, plans to scrap its proposed rise in probate fees. This was music to the ears of most it seems, especially those facing the hike.
If the rise had come in to effect on 1 May as planned, it would have meant fees of up to £20,000 for some estates – a 9,000% increase.
Abandoned proposal
The reason for abandoning the proposed rise was a belief that the government would find it too difficult to get the move ratified before the general election and Parliament was dissolved.
Ministers initially intended to press on despite a public consultation in which 97% of respondents were against it. Given this, it seems unlikely that public opinion was the driving force behind the change of heart.
More crucial perhaps were questions over the legality of the proposal. In the weeks, leading to its dismissal, the probate fee rise was labelled as unlawful by a group of MPs.
Critics claimed that, due to the size of the increase, it was a tax designed to generate income for the government rather than simply to cover to cost of administrating the probate process.
As a tax, it would have to be passed by parliament to become law. This was at the same time as power of attorney administration fees were being reduced as they collected more than was required to cover the cost of administering this.
The increase was criticised across party lines, so it is possible it was abandoned because Theresa May didn’t think she could carry the votes for it to pass.
If the election result goes the expected way, we could see the issue emerge again, in some form or another. Those having to pay the probate fee, and the legal and financial community advising them, shouldn’t forget about it entirely.
When the rise looked imminent, my practice was focussed on getting as many probate cases processed as possible by the end of April to avoid clients getting caught out by the hiked fee.
‘Period of uncertainty’
We now enter a period of uncertainty. We don’t know if the fee will come back, in what form, or when. Advisers should bear this in mind and emphasise to clients that probate applications should still be made as soon as possible to avoid a nasty surprise later down the line.
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