The Royal Courts of Justice in London.

Wealthy families face the prospect of a hundredfold increase in probate fees, which could rise to a maximum of £20,000 under deficit-reducing proposals announced by the government this week.

The Ministry of Justice has published plans to reduce the £1.1bn net annual cost of running the court system by introducing a progressive regime of probate fees in England and Wales.

Grant of probate, the document authorising an executor to deal with an estate, currently costs £155 where the deceased has left more than £5,000 in assets.

The government’s plans will raise the payment threshold to £50,000, taking most estates out of probate charges altogether. However, those with estates worth more than this level would have to pay considerably more.

The proposed charges range from £300 — for estates valued at no more than £300,000 — to as much as £20,000, for those worth more than £2m. Fees in between these values would increase progressively from £1,000 to £12,000 (see table).

“While very good news for low-value estates — some people wince at £155 when money is tight — it is just a tax on the wealthy,” said Joyce Bradbeer, a partner at solicitors Moore Blatch.

She said the difference in work involved for the probate registers between high and low-value estates was “negligible”. “This is grieving families subsidising the court service.”

Without a grant of probate as evidence of the right to administer an estate, executors cannot access bank savings or investments. Although high street banks can offer loans to cover inheritance tax until probate is granted, Ms Bradbeer said many were withdrawing this service, bringing into doubt whether they would cover probate fees too.

“You’ve already got to pay inheritance tax before grant of probate . . . It’s a dilemma how on earth you are going to raise this money on top,” she said.

Dora Clarke, a probate partner at law firm Withers, said the charges were “outrageously high” for large estates. “Looking at these fees, people will be thinking about how they can avoid probate.”

She said that more wealthy families could be tempted to put assets into trust as a result of the “very punitive” charges, or worse, succumb to fraud by giving away their assets under pressure.

Proposed fee structure
Value of estate (pre-IHT)Proportion of all estatesProposed fee
Up to £50,00057%£0
£50,000 — £300,00027%£300
£300,000 — £500,00010%£1,000
£500,000 — £1m5%£4,000
£1m — £1.6m1%£8,000
£1.6m — £2m0.2%£12,000
Above £2m0.4%£20,000
Source: Ministry of Justice

The probate service has recently suffered from cuts in funding, Ms Clarke said, giving rise to delays of up to two months in probate being granted.

Shailesh Vara, parliamentary undersecretary of state at the Ministry of Justice, said the proposals — estimated to raise an additional £250m a year — “would both increase income to make our courts and tribunals more sustainable and make the probate system fairer.

“Our proposals would lift 30,000 estates [a year] out of paying the probate fee altogether, so that the proportion of estates paying no fee at all would rise to 57 per cent.”

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