Inheritance tax, even though only one in 25 estates are subject to it, is probably the most loathed tax levied in this country.
That is clearly understood by nearly every politician.
George Osborne’s promise at the 2007 Conservative Party conference to lift the inheritance tax threshold to £1m enjoyed such a rapturous reception that it frightened Gordon Brown out of calling a snap election that autumn.
So any attempt to raise inheritance tax is likely to be politically toxic.
It must be for that reason that the government is currently sneaking a policy, which has a very similar effect, through the back door.
Ministers want to raise the fees charged by the courts for probate, the process by which a dead person’s estate is wound up, their debts settled and their assets distributed in accordance with their will.
At present, the courts levy a flat probate fee of £215, or £155 if the application for probate is made by a solicitor.
However, ministers instead want to introduce a sliding scale of fees depending on the value of the dead person’s estate, which it is estimated could result in 300,000 families paying higher probate fees every year. It is mooted to raise £145m in its first year.
Under the new system, there will be six bands of fees, with estates valued at between £50,000 to £300,000 being charged £250. Estates of between £300,000-£500,000 would attract a fee of £1,000.
Between £500,000 and £1m – a likely level for estates in London and the South East of England, given house prices in that part of the country – the fee ratchets up to £4,000, while estates of between £1m and £1.6m will be charged £8,000.
Read the full story on Sky News website.
