Changes to probate fees that could cost the charity sector up to £10m have been delayed by the government.
The changes to the fee system were due to be introduced on 1 April, but the Ministry of Justice said that it had been delayed due to preoccupation with other parliamentary business and will now be debated in the House of Commons.
Last month four umbrella bodies, Institute of Fundraising, Remember a Charity, the Institute of Legacy Management (ILM) and NCVO warned that proposed changes to probate fees (the cost of administrating a deceased person’s estate or will) would reduce legacy income available for charities when estates are left to charities due to increased processing costs.
They estimated that the changes could cost the sector £10m.
The bodies proposed that probate fees for estates and wills that include legacy gifts be reduced and requested a meeting with the Ministry of Justice to address their concerns.
In a letter addressed to the Istitute of Fundraising (IoF), Lucy Frazer, parliamentary under-secretary of state for justice said the changes had been delayed but that the government planned to press ahead, though did not give a timescale.
'Will have no substantial impact'
But the government said its planned changes would have no “substantial impact” on charities, following complaints from the umbrella bodies that increases could reduce the sector’s income from legacy gifts.
Frazer defended changes that will see probate fees changed from a flat-rate to fee bands. She said that changes in the system would not affect the charity sectors’ income.
She said: “I understand that your concern may stem from the potential impact on the charitable beneficiaries of more valuable estates, who will pay the high fees of £750 and above. I want to reassure you that the fees for these estates will never amount to more than 0.5 per cent of the value of the estate.
“With this in mind, we have assessed that there will not be a substantial impact on any individual beneficiary,” she added.
The MoJ has said that the changes were necessary to recover running costs of the courts and tribunal service, and said that currently, only some £710m of costs are recovered from an £1.8bn service.
She said that the fees will be used to help court users who cannot afford their own fees. “This additional income will be invested in the courts and tribunals”, she said.
She added that by increasing the estate value threshold from £5,000 to £50,000, 25,000 estates will be lifted from paying any fee at all.
In response to the letter Rob Cope, director of Remember a Charity said that legacy income was important for the sector and that the umbrella bodies were not reassured by the government’s response.
“We disagree that the planned probate fees will not be a substantial impact on individual beneficiaries,” he said.
He added that Cancer Research UK had calculated that the changes will reduce their income by £600,000 per year and echoed the sector’s proposal to offer a reduced rate for estates with legacy gifts.
Awaiting further debate, he said: “I’m encouraged that the Ministry of Justice have confirmed that the issue will go before the Commons. MPs will now have the chance to express their views and we are confident that they will agree with our stance.”