The Ministry of Justice (MoJ) has issued proposals to reform the system of probate fees and to introduce a new online service designed to make the process easier and smoother for executors.
This is against the background of cuts in public spending, an overall annual net cost of the courts and tribunals system to the tax payer of £1.1billion. However, note that the Probate Service is self-sufficient and any increases would be subsidising other areas of HM Courts and Tribunals Service.
The Latin word ‘probate’ means to test and find good. The MoJ seem to regard probate as a bureaucratic obstacle to be endured rather than a test of the validity of a will, nor is it used to ensure that the correct person deals with the administration of an estate upon intestacy.
The purpose of probate is to safeguard the interests of the deceased person, his or her creditors and the beneficiaries of the estate. The granting of probate is an essential step in an administration and is non-litigious, there is no basis for comparing it to a litigation matter.
The purpose of probate is not a tax-raising exercise and there is a well-established means of raising tax on death through inheritance tax which is subject to proper parliamentary scrutiny and debate.
There are numerous practical objections involving consequential hardship and inconsistencies between the proposals and inheritance tax rules. This is just one example:
A business owner, Bob, has a small business making and selling hammers worth about £1million, he has personal savings of £250,000 and a house worth about £400,000 in his name. In his will, Bob leaves the business to his trusted manager to continue as a going concern, his savings and house to his wife, Edie.
There would be no inheritance tax to pay because the business is exempt and the gifts to his wife are also exempt. The only cash in the estate is the £100,000. Edie will need this to live on and to support the children who are still at university.
Under the new proposals the probate fee will be £12,000. Under the existing fees structure, the fees are £155. The new fee of £12,000 needs to be paid upfront to the Probate Registry before the probate can be granted, therefore it would need to be paid from Bob’s savings.
There is an established legal principle called ‘res ipsa loquita’, which means that the facts speak for themselves … I hereby rest my case.
Solicitor and Head of Department at Jackson Lees
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