New probate controversy as MoJ dismisses ‘tax’ definition

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Update on the proposed probate fee increases sees Labour mounting a challenge to the stealth tax proposed by the chancellor. Under the proposed plans probate fees will be linked to the size of the estate and could cost people £6000 instead of the £155 payable now.

Fresh concern has been raised about the proposed overhaul of probate fees after the Office of Budget Responsibility said it expects the new fee structure to be classified as a ‘tax’ despite the fact ministers have previously rejected that assertion.

According to the ‘Office for Budget Responsibility: Economic and fiscal outlook’ published this month the Treasury is expecting the Office for National Statistics (ONS) to ‘classify the new structure … as a tax in the National Accounts.’ The document adds: ‘The new probate fee structure is expected to generate £155 million a year in additional tax receipts.’

A spokesperson for the Ministry of Justice (MoJ) today reiterated its stance that the new fee structure is not a tax. ‘Any decision by the ONS to define it as such would be purely for accounting purposes. The income raised from probate fees will go towards funding a more efficient and effective courts and tribunals system,’ they told the Gazette.

But Ian Bond, head of trusts and estates at West Midlands firm TalbotsLaw, said the description was significant. ‘Tax has to be introduced via primary legislation, subject to proper parliamentary scrutiny and not via a statutory instrument (SI). We echo the finding of the Lords Committee that this is a “stealth tax” and a misuse of the lord chancellor’s fee-levying powers.’

To read the full article visit the Law Society Gazette’s website.

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