‘In this world nothing can be said to be certain, except death and taxes.’
This famous quote, attributed to Benjamin Franklin, holds as true today as it did at the time of writing in 1789. Given that versions of this sentiment date back to the early 18th century, and continue to be in use in 2017, it seems that death and taxes are two of mankind’s main preoccupations.
And so it came as no surprise that a government plan to hike probate fees paid by bereaved families met with fierce opposition. Under the proposed changes, probate fees had been due to rise from £155 or £215 to up to £20,000 for some estates in England and Wales from May.
Now, following the Prime Minister’s decision to hold a snap election in June, these increases have been scrapped. The Ministry of Justice said last night that there was no longer time to push the legislation on new fees through parliament.
Put simply, probate charges are paid to central government when someone dies. Following a death, the executor of their estate gathers the deceased’s assets to distribute to beneficiaries of a will.
Described by critics as a ‘stealth death tax’, estates worth £300,000 to £500,000 would have paid a £1,000 fee under the proposals, while those worth £2 million or more would have paid £20,000. Even smaller estates would have been hit by a rise in costs: those worth more than £50,000 and up to £300,000 would have attracted fees of £300.
When you consider that the average price of a house in the UK is now £217,502, with average properties in London costing £474,704, that band of £300,000 to £500,000 is sure to include families who do not consider themselves well off – in terms of disposable income, anyway.
Having said that, there was some good news in the now defunct plans. The threshold below which no fee was due would have risen from £5,000 to £50,000, releasing approximately 25,000 estates out of the requirement to pay a probate fee each year.
Nevertheless, with just seven weeks left before the country goes to the polls, the government is bound to row back on other unpalatable policies. Watch this space.
Helen Nugent is Online Money Editor of The Spectator