Recent government proposals have been announced whereby individuals would be forced to pay up to £20,000 in compulsory government probate fees.
Currently, only estates valued at less than £5,000 are exempt from the government probate fee. Under the new proposals, the threshold would increase to £50,000. Supporters of the plans argue that this would exempt 60% of people from paying the ‘death tax’.
However, it’s not great news for the ‘squeezed middle’. Those set to inherit the family home worth the UK average of £300,000 will be expected to pay £1,000 in government probate fees, more than six times the current level.
Says Julia Whelan, tax partner licenced to carry out probate work at Curo Chartered Accountants “Government probate fees have increased significantly over the last couple of years and the proposed hikes are aggressive, representing bad news for many due to inherit what are considered ‘modest’ estates’. This charge is in addition to fees payable to the accountant or solicitor carrying out the probate work and makes an already upsetting situation even worse”.
It is not known when the proposed changes are likely to come into force. Adds Julia “As the probate fees are based on estate values at the time of death, it is worth speaking with a tax specialist to understand your inheritance tax options.”