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England and Wales probate applications can be submitted before IHT clearance, while new fee scale remains in limbo
Thursday, 28 March, 2019

Personal representatives (PRs) have been told they can submit applications for probate before they receive clearance of their inheritance tax (IHT) ‘account’ from HMRC, in a temporary concession to deal with the current uncertainty over probate fee scales in England and Wales.

Last November, the Ministry of Justice announced plans for an enormous increase in probate application fees for higher-value estates, replacing the current GBP215 flat fee with charges based on the value of the estate, up to GBP6,000 for estates of GBP2 million or over. The proposal attracted vocal opposition, but the government refused to drop it, persisting with a scheduled launch date of 1 April 2019.

However the necessary legislation, the Fees Order, has not yet been laid before parliament. Moreover, some Labour MPs have said they will oppose the statutory instrument, slowing down the process. Since a statutory instrument takes at least 21 days to come into effect after an order is approved by parliament, the new fee scales cannot now take place on 1 April after all.

In the meantime, PRs have been rushing to get their grant applications submitted before the new fees come into force. This has increased the pressure on probate offices, as well as on HMRC, as probate offices cannot normally proceed with an application until HMRC has issued a clearance letter accepting the associated inheritance tax account. The situation has not been helped by the unavailability of HMRC’s inheritance tax online service for much of this week.

So, as a temporary measure, HMRC has introduced a new process to deal with the current rush. While the new fee structure is still in abeyance, probate registries will accept applications for probate before the account has been processed by HMRC. The PR must include a note on the application to say that the appropriate inheritance tax forms will follow shortly.

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