Government drops new probate fees branded as "stealth tax"

 
Jasper Jolly
Picture taken 12 April 2004 of the world
The biggest estates would have faced £20,000 probate fees (Source: Getty)

A controversial increase in fees on estates after death will not be brought in before the General Election, raising the prospect it could be quietly shelved.

Probate fees, which are currently as low as £155 for solicitors, would have risen by more than 100 times for the largest estates.

The fee rises faced widespread opposition from solicitors and politicians, with MPs and economists saying the sliding scale of the fees resembled a new tax rather than a straight fee.

Read more: Probate fees set to rise by almost 100 times for big estates

Under the plans fees for probate would have risen to £20,000 for estates larger than £2m. Estates worth less than £50,000 would have paid nothing, while estates worth between £500,000 and £1m would have paid £4,000.

As the fee is unavoidable for most estates lawyers advised the new structure might actually have been illegal.

John Gould, senior partner at law firm Russell-Cooke, said: “Our advice was that the charge was in substance taxation. This mattered because the government was proposing to introduce the fee without legislation.

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“It is a long established constitutional principle that taxation can only be imposed by an Act of Parliament.”

Objections were raised by MPs on the Joint Committee on Statutory Instruments.

The fees would have raised an estimated £300m per year in extra revenue at the same time changes made by the Conservative government have this month lowered inheritance tax by introducing a separate tax-free allowance of £175,000 for homes.

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