A group of charity finance specialists have called on the Ministry of Justice to ensure that charities are not hit by probate fee increases which would cost the sector £18m a year.
Earlier this the MoJ announced plans to increase probate fees on higher value estates. These plans were shelved due to the general election, but charities fear they may now be reintroduced.
The MoJ has now been asked not to push the plans through in an open letter, published in The Times yesterday, and signed by groups including the Institute of Legacy Management, the Charity Finance Group, the Charity Tax Group and the Small Charities Coalition.
“We are concerned that new fees would significantly reduce income for charities reliant on legacy gifts,” the letter says. “If the charges were pushed through, probate fees would be graded according to estate value and not as a fixed charge for a service. Critics argue that this amounts to a stealth tax.”
Around 38,000 estates with a charitable legacy went to probate last year. The average value of such an estate is £425,000, and current probate fees are £215. But the cost of the typical charity estate would rise to £1,000 or £,4000.
The probate changes, if reintroduced, would see charities pay five times as much in fees as they currently do.