A House of Lords committee has criticised the government over proposals to increase probate fees, saying it amounted to a “stealth tax” and was a “misuse of the fee-levying power”.
In a report published yesterday, the House of Lords Secondary Legislation Scrutiny Committee was again critical of the government’s proposals and said that, while the new proposals put forward earlier this month did reduce individual fees, the “fee bears no relationship to the actual cost of approving the probate application and has the appearance of a tax”.
Justice minister Lucy Frazer bought new legislation increasing probate fees paid on the value of estates and removing the existing flat-rate fee of £215 before parliament on 6 November.
Frazer also proposed a series of probate fee bands be bought in “raising the estate value threshold from £5,000 to £50,000” which would lift “around 25,000 estates annually out of fees altogether”.
A similar model was proposed in early 2017 but was shelved ahead of the election.
Frazer said the proposed changes would generate £145m in additional fee income for the government to use on the running costs of other parts of the courts and tribunal services.
A number of charitable umbrella bodies and membership groups have argued that the new proposals could end up costing the charitable sector £10m a year in lost legacy income.
The House of Lords committee report said this represents a “significant moved away from the principle that fees for a public service cost should recover the cost of providing it and no more,” and asked whether the House “envisaged the power being used for this degree of cross-subsidy” when the act was passed.
The report also said the committee had separate statutory instrument which would introduce an online application process for processing probate fees, which would on average cost £9.30.
“That the draft Ministry of Justice Order seeks to increase these fees by so much at the same time as laying the rules that will reduce the unit cost of an application by an average of £9.30, only serves to highlight the committee’s concerns about the disproportionate increase in the fee levels proposed by the affirmative instrument.”