2 April 2019
The Institute of Fundraising received a response from Lucy Frazer MP. The reply explains why the government will not include a charitable exemption.
Rob Cope, Director of Remember A Charity, commented on the reply:
“We disagree that the planned probate fees will not be a substantial impact on individual beneficiaries.
“Cancer Research UK have calculated that these changes will reduce their income by £600,000 per annum, which could pay for two years of trials of a new targeted Prostate Cancer drug.
“Legacy income continues to grow and have a massive impact for the work of good causes. For this reason, Remember A Charity and the IoF will continue to warn against the unintended consequences of the fee. We also strongly believe that this is an opportunity to grow giving by creating a discounted rate for charitable estates.
“I’m encouraged that the Ministry of Justice have confirmed that the issue will go before the Commons. MPs will now have the chance to express their views and we are confident that they will agree with our stance.”
12 March 2019
A joint letter from Remember A Charity, Institute of Fundraising, Institute of Legacy Management and NCVO was sent to Lucy Frazer MP, alerting her to the negative impact of the planned changes on charities and requesting a meeting to discuss a proposed alternative approach.
The Telegraph reported on the probate fee ‘stealth tax’ and its impact on charities.
7 February 2019
Plans to hike probate fees were approved by Government. The plans were approved by nine votes to eight at a Delegated Legislation Committee.
It is estimated this could cost charities in the region of 10 million annually in legacy income.
Lucy Frazer MP, the Minister responsible for the legislation, confirmed the new charges will come into force in April, barring a majority of objections by the House of Commons. She also stated that guidance on how to pay fees will be published before the changes take effect.
The next stage is for the Order to go to the House of Commons for approval. The date for this has not yet been announced.
9 January 2019
STEP received a reply to a letter to Lucy Frazer MP, the Minister responsible for the legislation, which set out their concerns with the proposed changes. The reply restated the government’s rationale for introducing the measure and refuted the assertion that it represented a tax rather than a fee covering the cost of a service. You can read the full reply here.
18 December 2018
The Non-Contentious Probate Fees Order 2018 was debated in the House of Lords on 18 December 2018. As an affirmative measure it required a majority to pass. The House stopped short of rejecting the Order, but put on record its concerns, with the following Motion to Regret moved by Lord Beecham:
‘This House regrets that the draft Order will introduce a revised non-contentious probate fee structure considered by the Secondary Legislation Scrutiny Committee to be “so far above the actual cost of the service [it] arguably amounts to a stealth tax and, therefore, a misuse of the fee-levying power” under section 180 of the Anti-social Behaviour, Crime and Policing Act 2014; and that this Order represents a significant move away from the principle that fees for a public service should recover the cost of providing it and no more.’
5 November 2018
Lucy Frazer MP, the justice minister, announced that the government was revising its previous proposals for reforming probate fees and would be pushing ahead with removing the existing flat rate of £215.
Instead, probate fee bands would be brought in, she said, with estates of more than £50,000 paying between £250 and £6,000, with the maximum amount reserved for estates worth more than £2m.
In response to the Government’s announcement of this new probate fee structure, the director of Remember A Charity, Rob Cope, said:
“The new probate structure will see charitable Wills costing – in some cases – thousands of pounds more than they do currently and our concern is that this could deter people from leaving a donation in their Will. After all, if estate planning comes with such a hefty price tag for wealthy individuals – many of whom leave sizable gifts to charity – they may think again.
“While Government expects to generate £185 million from the increased charges by 2022-2023, it is important to remember that charitable bequests are worth almost £3 billion a year for good causes. The sector cannot afford to risk losing legacy income and we call on Government to consider the potential disproportionate impact of this decision.”