Farmers will soon face fees of £20,000 to make sure their loved one’s wishes are carried out after they die, a solicitor has warned.
The Government has announced it is to significantly increase the fees charged to obtain a grant of probate. The new fees will come into force from May this year.
When a person dies, anyone dealing with their estate, perhaps a spouse or close family member, must obtain a grant of probate before they can distribute their assets as set out in a Will. It gives them the authority to deal with bank accounts and property matters, for instance.
Currently there is a fixed fee system in place which means that people can expect to pay around £150-£250 for a grant.
However, following a consultation, the Government has announced it is introducing a new fee structure, meaning those with larger estates – such as many farmers – will face a dramatically increased fee.
Kathryn Harwood is head of Wills & Estate Planning at Napthens solicitors in Cumbria. Napthens is one of the few NFU panel firms in the region, and operates a dedicated rural service.
She said: “The new fee structure will mean that while the majority of UK estates – those with a value of up to £50,000 – will now face no probate fee at all, those worth more than this amount will face significantly increased fees.
“The top tier of fees is for estates worth more than £2million, which will face a proposed fee of £20,000.
“It is not unusual for farmers and others with rural businesses to be in the position where they can be described as cash-poor but capital-rich.
“A large farm with associated buildings and machinery could quite easily be worth more than £2million, but the farmers and family may simply not have access to £20,000.
“Farmers receive agricultural relief for inheritance tax, but will now face what some in the industry have called a ‘tax by the back door.’
“In my role I have met plenty of people who might be putting off applying for a grant of probate – perhaps the spouse of someone who has died, and may feel they don’t need the grant at that stage, or may be relying on their children to apply in the future when circumstances change again.
“This announcement makes it clear that people should not put off applying for a grant any longer, and if they can, apply before May of this year or face potentially crippling fees.
“Farmers and anyone else who could be affected by this news should seek professional advice over the best way to have their estate valued and how a solicitor can help with a grant of probate.”