The planned 13,000% rise in probate fees is yet another dishonest wealth tax
The government is planning to increase probate fees for large estates by a massive amount. It’s just another stealth tax on the wealthy, says Merryn Somerset Webb.
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Tax collection: around the world governments are having a go at doing more and getting more. There's FATCA; there's the CRS; there's the recent judgment on Apple's arrangements see the magazine for more on this. And there are the little tax rises they hope we don't notice.
The government plans to change this so that estates worth more than £50,000 pay higher fees in some case, much, much higher fees: leave over £2m and your executors will need to come up with £20,000 just to get probate (a rise of nearly 13,000%).
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This is the kind of scale of increase that effectively turns a fee into a tax: most probate applications involve the same admin work regardless of the size of the estate, so a sliding scale of fees makes no logical sense and the current level of fees is already enough to fund the Probate Registry itself.
It is also a tax that just like inheritance tax has to be paid before the estate is released. Leave £1 over £2m and the executors will have to find over £680,000 before they can get access to the £2m itself.
It's pretty easy to see what's going on here. The state would like to raise taxes. It would particularly like to raise taxes on the well off. But that's tough to do wealth taxes are controversial and all discussion of tax rises come with publicity, push back and legislation.
It's much easier to stick with the tried and tested stealth tax route to money raising and shove up "fees" instead however dishonest that might look to those that notice.
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