Increase in Probate Court fees and changes to the “excepted estate” rules

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The new year has brought with it some new rules and Probate Court fees. This is what these changes mean for you.

Increase in Probate Court fees

Currently the Court fee for a Grant of Probate or Grant of Letters of Administration is £155 if the application is made by a professional, such as a law firm, and £215 if the application is made personally.

In 2016 and 2019 the Government proposed to increase the Probate Court fees, but this was never implemented.

The Probate Court fees will now increase to a single, flat rate of £273 for all applications from 26th January 2022, regardless of the size of the estate. However, there will not be a fee payable for estates of less than £5,000.

The Ministry of Justice justifies the increase by stating that the increase in fees will assist in recovering the £85m deficit in the delivery of services in the family jurisdiction.

Changes to the ‘excepted estate’ rules

An excepted estate means that an IHT400 is not required when applying for a Grant of Probate/Letters of Administration and that there is no liability for inheritance tax.  

There are two main types of excepted estate:

  • Low Value Estates – these are estates where the deceased died domiciled in the UK and there is no liability for inheritance tax because the estate does not exceed the nil rate band of £325,000. This may be higher if the deceased was married or widowed, as married couples can combine their nil rate band allowances.
  • Exempt Estates – these are estates where there is no liability for inheritance tax because spouse or civil partner exemption and charity exemption can be deducted and the gross value of the estate does not £1,000,000.

From 1st January 2022, The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021 made changes to exempt many estates from the need to submit detailed estate returns. The changes are as follows:

  • They raised the threshold gross value of an excepted estate from £1,000,000 to £3,000,000
  • They raised the value threshold of an excepted estate’s chargeable trust property from £150,000 to £250,000 (although, the total amount of trust property including exempt amounts us limited to £1,000,000.
  • The value limit in relation to specified lifetime transfers was increased from £150,000 to £250,000.
  • The definition of “IHT threshold” was amended to include estates where the unused percentage of a deceased spouse’s nil rate band is being claimed.
  • They simplified the alternative information that is to be produced for both small estates and exempt estates.
  • The excepted status was removed from estates of foreign persons where the deceased either owned indirect interests in the UK residential property or made lifetime gifts of UK assets above £3,000 in the 7 years before death unless the estate is not liable for IHT.

What does this change mean?

This means that there will be more cases where there will be no need to file a detailed Inheritance Tax Form (IHT 400).

It is therefore essential to seek advice from a professional when applying for a Grant of Representation to ensure that the IHT forms are completed correctly. 

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