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Is the government trying to introduce a ‘stealth death tax’?

20 November

Is the government trying to introduce a ‘stealth death tax’?

Specialist Wills and Probate Solicitor, Charles Neal, examines the government’s latest plans to increase probate registry fees.

In 2017 the Government tried to significantly increase the fees paid to Court for a Grant of Representation, commonly referred to as Grant of Probate. Their plan was to introduce a tiered system so that the higher the value of the deceased estate, the higher the fee. Understandably there was a significant amount of condemnation, with critics referring to it as a ‘stealth death tax’. Eventually, and only following a Court ruling, the planned increase was withdrawn. 

However, the government seems undeterred, and less than two years later, they are trying again to introduce the change. 

There was no mention of this proposed increase in the October 2019 budget speech given by the Chancellor Philip Hammond.  But a recent statement confirmed that new legislation is planned to introduce a banded structure for probate fees based on the size of the estate. 

The Government claims that it has listened to the concerns expressed first time round. Certainly, they are no longer trying to impose an enormous fee on high net worth estates. They also claim that the fees will be ringfenced so that all the income generated will be spent on the Court and Tribunal Service, arguing that the additional monies will help to fund vulnerable Court users, thereby reducing the burden on taxpayers to pay for the Courts. 

This statement confirms that the increase in court fees is, unarguably, a stealth death tax. It is a fundamental job of the State to provide a Court Service which is paid for through general taxation. This allows access to justice and administration to all through the Court system which is paid for by all though the tax system. 

It’s also important to know that the administrative task of providing a Grant of Probate does not substantially vary because of the value of the estate. On that basis, with the exception that very small estates should be exempt, it seems clear that the administration charge should be the same for everyone. If there is a desire to tax higher net worth individuals on death then this should be done by the established Inheritance Tax system which is, at least, open and transparent. 

Whilst the Government may have taken something from the protests from 2 years ago, they need to listen more carefully and should now take steps to remove this plan altogether.

Charles Neal