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Race to beat the new ‘death tax’

As March draws to a close we are still awaiting confirmation as to when the new death tax that could hit up to 300000 bereaved families a year will come into effect. Executors have been issues warnings, stating that they should act in a timely manor to ensure they don’t open themselves up to claims.

The controversial price rise, which is anticipated to come into force in early April has been delayed due to a limit of parliamentary time but will see probate fees rise from the current flat rate of £215 (or £155 if you submit the application via a solicitor) up to £6000 for the largest estates.

There appears to be no justification for the sliding scale of fees as the work required by the probate registry is the same regardless of the value of the estate.

To make matters more difficult, these fees have to paid upfront before access to the funds of the estate is possible. This means bereaved relatives may have to take out loans just to access what has been left to them and it should be noted that this charge is in addition to any inheritance tax liability due.

Usually a rise in tax would be introduced through a parliamentary bill which would have to be debated and then voted on, but this is being classed as a fee rather than a tax, meaning it can be introduced by Statutory Instrument which receives less scrutiny. It is hoped a formal objection will be lodged giving the house the chance to vote on the proposals, but this is be no means certain at this stage.

Whilst the probate registry gears up for the expected surge of applications with executors trying to beat the price increase, we urge executors not to rush and make errors that could lead to claims at a later date.

Much criticism has been made of the timetable The Government has chosen to implement the charges, which are seen as adding unnecessary pressure to bereaved families by bringing in the new charges from the date the application is received instead of for applications for probates for people who die after the changes are made.

So while we wait for the exact timescale to be announced, The Ministry of Justice have confirmed that once the motion is approved, the new probate fee regime would come into effect 21 days later, our advice is not to delay and if you have all the information required then submit your application before the fee hike to avoid any potential claims for delay by beneficiaries.

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