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The government’s plan to introduce dramatic increases in probate fees was struck with a major blow yesterday, as MPs questioned whether it could be introduced without the consent of parliament.
Expected to come into effect in May, the probate fee increases sees the current flat rate (£215 or £155 if using a solicitor) replaced with a banded structure where fees increase in line with the estate.
This banded structure, which starts at £50,000, means those with assets of over £1 million will have to pay probate fees of between £8,000 and £20,000.
The move was widely criticised when it was announced with many quick to label it a death tax in all but name.
However, according to a report in the Times, the policy suffered a severe setback yesterday as MPs on the statutory instruments committee said the changes have ‘all the hallmarks of taxes rather than fees’ and so the policy could break the principle that all tax changes must go through parliament.
As the changes are due to come into effect next month, forcing the policy to go through the House of Lords and the House of Commons could lead to a delay in its introduction.
Tory MP Jacob Rees-Mogg told the Times it would be difficult for the government to go ahead with the changes now.
‘This is very good news,’ he told the paper. ‘I think it would be very hard now for the government to proceed with these proposals. They always seemed to amount to a stealth tax.’
The increase in fees was going to be used to raise £300 million to the courts and tribunal system.
The Ministry of Justice told the Times: ‘Our plans to introduce new probate fees remain unchanged. We will introduce a fairer system, meaning over half of estates pay nothing and over 90% pay less than £1,000. They will be considered in parliament after Easter and come into force as soon as possible.’