Friday, 21 April 2017 10:26

'Stealth death tax' becomes victim of snap election

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An increase to probate fees which was branded by critics as a “stealth death tax” has become one of the early victims of the snap election.

The probate fee order was still being discussed in parliament on Wednesday but the Ministry of Justice have reportedly said time had run out for the legislation to go through Parliament before the June 8 election.

The flat rate probate fee of £215 or £155 if using a solicitor was due to be changing to one which is tiered based on assets. The change would have meant lower value estates were exempt from any charge, but the charge on estates which exceed £50,000 will increase – some quite dramatically.

The Society of Trust and Estate Practitioners (STEP) said it had expressed concern from the outset at the Government’s proposals for reform of probate fees on grounds of fairness, practicality and legality.

Gordon Andrews, tax and financial planning expert at Old Mutual Wealth, said: "The u-turn on the increase to probate fees reveals concerns over the regulation’s unpopular nature. The label as a stealth tax has made it unpalatable to the government in the run up to the snap election.

“This is the second u-turn since the Spring Budget, following the Chancellor’s swift u-turn on NICs. This leaves an even larger gap in the exchequer, which will now have to be filled.

“The opposition could view this as another tax break on the wealthy, since the proposal on probate fees stepped up depending on the value of the estate on death.

“With the announcement of the snap election a question mark was hovering over probate fees and the Finance Bill. With all parties fighting for votes, all eyes will be on how the Government will deal with other controversial proposals.”

He said: “Regardless of what happens now, the current Conservative Government have drawn a line in the sand and have to some extent shown their hand – whilst these proposals have been shelved for now it will be interesting to see if the changes to probate fees are revisited after the election.”

Details of whether the change will go forward under a new Conservative Government could come when the party manifesto is released in coming weeks.

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