In a further twist in the tale, the Ministry of Justice has confirmed that the controversial change to the probate court fees, as outlined in our previous article in November 2018, will not come into force on 1 April 2019, as the Government had originally hoped.
Following the approval of the proposed change by the House of Commons Delegated Legislation Committee in February 2019, it is necessary for a statutory instrument giving effect to the banded fee structure for grants of representation based on the value of the net estate to be laid before Parliament, with the statutory instrument then coming into force 21 days after its approval. So far, a date has not been set for the statutory instrument to be laid before Parliament – and presumably MPs are currently occupied with Brexit. The Easter recess is also due to begin this week, on 4 April 2019, ending on 23 April 2019. Approval of the statutory instrument could therefore be subject to further delay and not put before Parliament until the end of April, even if the recess is postponed due to Brexit. On that basis, the new probate court fee structure cannot be introduced before mid May.
Despite the recent confirmation from the Ministry of Justice, on 27 March 2019 H M Revenue & Customs (HMRC) stated that, whilst the process for introducing the new probate fee structure is ongoing, the probate registries will be accepting applications for grants of representation before the Inheritance Tax Account has been processed by HMRC, provided that the application to the probate registry is noted to say that the appropriate inheritance tax forms will follow shortly. Normally, it is necessary to submit the inheritance tax forms to HMRC and to obtain the appropriate receipt before applying to the probate registry for a grant of representation. However, it can take several weeks for the receipt to be received from HMRC, leading to a delay in applying to the probate registry. Therefore, both HMRC and the probate registries are prepared to accept “split applications” whilst the new probate court fees are being introduced to enable applications for grants of representation to be made under the present probate court fee structure.
There are also additional potential complications to the introduction of the new probate court fees, in that the Office for Budget Responsibility’s Economic and Fiscal Outlook Report published in March 2019 supports the view of the Law Society that the new fee structure constitutes a tax, and the Treasury is expecting the Office of National Statistics to classify the new fee structure as a tax in the national accounts. However, despite this, the Ministry of Justice is standing firm in its argument that the new fee structure is an enhanced fee, not a tax. The Labour Party has also indicated that it will object to the statutory instrument, which would give the House of Commons the chance to vote on the new fee proposals.
At the time of writing, we do regard this as merely a delay to the change in probate court fees, rather than an intention to retain the current fee structure. However, with so much uncertainty in the world of politics at the moment, anything is possible! If there is a general election or a change of leadership of the Conservative Party in the near future, the proposed changes may be put to one side indefinitely.
We would continue to urge all clients who are currently involved in an application for a grant of representation to contact us for further advice, and we will continue to publish updates as and when we hear further about the introduction of the new probate court fees.