Probate fees will hit farmers hard

Last month the Government announced a consultation over proposals to reform probate fees – the fees payable at the Probate Registry to the Court service when one applies for a Grant of Representation to administer an estate. The Government wants to charge staggered or progressive fees, dependent on the size of the estate. For those wishing to represent estates of £2 million or above, the proposed fee will be £20,000.

Farming families are likely to be unduly affected because valuations attached to woodland and infrastructure, as well as the farmhouse can often mean a farm is valued above £2m for inheritance tax purposes, even if the day-to-day farm itself is at subsistence level. This means the family inheriting the estate will have to find the money for these enormous fees, as well as, in many cases, pay inheritance tax.

Because the fees will be prohibitive for many, we worry that many people will be tempted to cut corners rather than seek proper legal advice. As solicitors, we are officers of the Court and owe an overriding duty to the state to disclose any attempts to avoid paying Inheritance Tax. Unregulated will writers and estate administrators have no such legal duties and will often charge fees that at first glance seem more appealing.

However, with these unregulated schemes comes increased risk. They leave consumers with little recourse in the event of anything untoward happening such as being considerably overcharged because of hidden fees, or if an estate is administered incorrectly – which are both pretty likely scenarios in these cases.

Ironically, any increase in unregulated schemes is likely to actually lead to a reduction in receipts for inheritance tax for HMRC, the very opposite of what it’s trying to achieve. It really is a masterclass in the perils of unintended consequences and false economies, and we urge the Government to reconsider.

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