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Grieving Families Could Be Forced To Pay A New Death Tax

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Link: http://www.telegraph.co.uk/finance/personalfinance/tax/12164010/Grieving-families-could-be-forced-to-pay-a-new-death-tax.html

The fee would then rise sharply depending on the value of the estate

The fee would then rise sharply depending on the value of the estate

Picture: Rex

By John Bingham, Social Affairs Editor

7:29PM GMT 18 Feb 2016

For some families it could amount to a potential 129-fold increase in costs

Bereaved families could be forced to pay what amounts to a new death tax of up to £20,000, under Government plans.

Ministers claimed the changes to the system of probate fees charged to activate a will would be fairer to poorer families by ensuring that many would no longer have to pay.

But for some families it amounts to a potential 129-fold increase in costs as part of a scheme to intended to raise £250 million for the Exchequer.

George Osborne, the Chancellor of the Exchequer

George Osborne, the Chancellor of the Exchequer Julian Simmonds/The Telegraph

It would mean a loved-ones inheriting a modest family home worth £300,000 would now face a charge of £1,000 more than six times the current level.

The fee would then rise sharply depending on the value of the estate.

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Those worth more than £500,000 now just under the average London house price would incur a charge of £4,000 rising to £8,000 for those worth over £1 million and £20,000 at the top end for estates amounting to over £2 million.

Court fees are never popular but they are necessary if we are, as a nation, to live within our means."

Shailesh Vara

At present, the executors of a will pay a flat fee of just £155 if acting through a solicitor a fee which itself was already sharply increased from just £45 in 2014.

Shailesh Vara, the Justice Minister, acknowledged the new fees, would be unpopular but said they would be a critical contribution to cutting deficit as well as helping pay for an overhaul of the burdened courts system.

A consultation on the new fees was launched as political attention was focussed on the negotiations in Brussels over Britains membership of the European Union.

Bob Neill, chairman of the Justice Select Committee

Bob Neill, chairman of the Justice Select Committee

In a letter to Bob Neill, chairman of the Justice Select Committee, Mr Vara said: Court fees are never popular but they are necessary if we are, as a nation, to live within our means.

These proposals would raise around an additional £250 million a year, which is a critical contribution to cutting the deficit and reducing the burden on the taxpayer of running the courts and tribunals.

He added: "These proposals are progressive, with lower value estates lifted out of paying any fee at all and other estates only paying more as the value of estate increases.

"These proposals would raise around an additional £250 million a year, which is a critical contribution to cutting the deficit"

Shailesh Vara

"They are also necessary, making a significant contribution to reducing the deficit and enabling investment which will transform the courts and tribunals service.

The Ministry of Justice insisted that only one per cent of estates would incur the top fee of £20,000 and that almost six in 10 would pay no fee for probate at all.

That means that around 2,700 families a year would face the top fee.

At present only estates worth valued at less than £5,000 incur no probate fee.

That threshold would rise to £50,000 under the proposals. The consultation runs until April.

Use our inheritance tax calculator to work our your liability

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Taxy taxy Tories

Funny how "reducing the burden on the taxpayer" = increasing the burden on the taxpayer

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And the super rich still get a flat fee. If it's fairness it should just be a % of the estate with no maximum cut off. If this is about reducing the deficit which it isn't. It's about increasing the tax burden on the lower classes.

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And the super rich still get a flat fee. If it's fairness it should just be a % of the estate with no maximum cut off. If this is about reducing the deficit which it isn't. It's about increasing the tax burden on the lower classes.

You beat me too it. I'd be right up for this if it wasnt capped

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And the super rich still get a flat fee. If it's fairness it should just be a % of the estate with no maximum cut off. If this is about reducing the deficit which it isn't. It's about increasing the tax burden on the lower classes.

But they are progressive because the really poor avoid £155 - woopy-do ! I guess the rich would tend to avoid the tax anyway, so by capping maybe they are trying to encourage payment.?

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No surprise here.

Did anyone think the govt wouldn't want a slice of all that lovely housing equity they've been dishing out to Joe Public for the last 20yrs ?

I'm all for it. Given they are asking for £110+ just for me to renew my 10 yr passport, the current fee for death admin. seems quite low.

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The more death taxes the better IMO. Feudalism is not attractive.

I'm with you. It's always puzzled me why an electorate who tolerate being taxed between a third and over a half of their earned income are so appalled at the notion of inheritance tax.

Estates should be free of tax but recipients of the windfall should taxed at their marginal rate, as though it were income, albeit unearned.

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Calling it a death tax is rather too emotive for my liking... It's just varying the existing fee based on estate size.

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