HUGE INCREASE IN PROBATE FEES "MORALLY WRONG"

PROPOSED DEATH CHARGES: A NEW TAX ON ESTATES

Relatives inheriting estates worth more than £300,000 are going to be hit with huge increases in court fees as the government looks to target them as a way to reduce its Budget deficit.

Millions face having to pay extra probate charges of up to £20,000 as the Ministry of Justice proposes scrapping the current fixed fee of £215.

Top 40 accountants Bishop Fleming branded the charges as a new inheritance tax in all but name as the "astronomical" increase is expected to raise an additional £250m for the Treasury.

According to the government's own figures, the current flat fee already adequately covers the administrative costs for the courts in processing grants of probate - giving executors the right to distribute the proceeds of someone's will. The current fee does not change whether the value of the estate is worth £5,000 or £5m.

The new system would impose a slab-based tax starting at £300 for estates worth between £50,000 and £300,000, but an estate worth £300,001 would pay £1,000, that is £785 more than now for an extra £1. An estate valued at £2m will pay £12,000, but an estate worth £2,000,001 will pay £20,000 - an extra £8,000 for just £1 more.

With figures showing average house prices in the UK having soared to around £288,000 by the end of 2015, thousands more estates look likely to be caught by the new charges as prices continue to rise.

Bishop Fleming Partner, Matthew Lee,explained: "Not only are the proposed increases morally wrong as they are a further tax on grieving relatives, but the fact that the government wants to impose a slab system of tax that has previously been recognised as unfair makes an already difficult situation for the bereaved even worse".

Couples face a double whammy in that the new fees will have to be paid both on the first death and the second - up to £40,000.

Defending the proposed increase, the government claims estates will benefit from an increased nil-rate Inheritance Tax band for homes inherited by descendants, but according to Mr Lee many estates will not benefit from this as they won't have the right kind of asset or the right kind of descendant.

"This is a disguised Inheritance Tax and the government is being sneaky in introducing this as a simple fee for dealing with people's estates," Mr Lee added.

The government has asked for responses to its proposals by 1 April 2016.

END

FURTHER INFORMATION:

• Matthew Lee: mlee@bishopfleming.co.ukor 0117 9100 250

• Julian Cramp:jcramp@bishopfleming.co.ukor 01392 448800

NOTES TO EDITOR:

• Bishop Fleming is a UK Top 40 firm of accountants with offices in Worcester, Bristol, Bath, Exeter, Torquay, Plymouth and Truro.

• Bishop Fleming has been ranked 49^thin The Sunday Times 100 Best Companies to Work For.

• Bishop Fleming was shortlisted for "Top 50 Tax Team of the Year" in the British Accountancy Awards 2015.

• Bishop Fleming was highly commended for the "Mid-Tier firm of the Year" in the British Accountancy Awards 2015.

• Bishop Fleming won accreditation as an "Outstanding Investor in Clients" (Investors in Customers) in 2015.

• Bishop Fleming was listed as one of the 4 "Best Employers" by Accountancy Age in 2013.

• Bishop Fleming was the first UK accountancy firm to win "Investors in People" accreditation (and has secured re-accreditation ever since).

• Bishop Fleming is a member of Kreston International, a network of independent accounting firms in more than 100 countries.

• The firm focuses on serving and championing owner managed businesses and has sector teams specialising in:

• Academy Schools

• Charities, Schools, and not-for-profit

• Healthcare including Care Homes, Dentists and doctors

• Hotels, Leisure & Tourism

• Manufacturing Technology and Innovation

• Renewable energy

• Property & Construction

• Media & Creative

• Professional Practices.

• Bishop Fleming is unusual in having:

• A full-service payroll operation

• An independent financial advisory service (IFA)

• Tax Partners with international experience

• A VAT Director and a Technical Tax Manager.