Friday 21 April 2017

Government Scraps 'Death Tax' Plan Because Of Lack Of Time

death tax

The Government has scrapped plans to raise the legal fees paid after someone dies, known as the “stealth death tax” to critics.

The Ministry of Justice confirmed that there would not be enough time for the proposed revision, which could have led rich families to face fees of £20,000, to complete its passage through Parliament.

The proposals could have raised £300 million each year for courts and tribunal services. The “death tax” now will be dealt with the Government elected on 8 June.

The fees relate to a grant of probate, obtained when someone dies. It give an individual – usually the executor of a will – the authority to deal with the deceased’s property, money and possessions.

Flat rate to sliding scale

The application for a grant of probate costs £155 or £215 – paid to the Government – for estates with a value of at least £5,000. Under the Tory’s proposals, the flat rates would have been replaced with a sliding scale of fees.

Estates in England and Wales worth between £50,000 and £300,000 would have incurred fees of £300. An estate worth in excess of £2 million would have incurred a fee of around £20,000.

However estates worth less than £50,000 would not have attracted a fee – the minimum limit currently stands at £5,000.

25,000 benefit from new lower limit

Around 25,000 estates would have benefited from this lower limit had the proposals gone through.

The proposals have been controversial in Parliament. Earlier in April, the Joint Committee on Statutory Instruments said the new charges had “the hallmarks of taxes rather than fees”. A spokesman for the Ministry of Justice said the Government wanted to “introduce a fairer system”.

If Theresa May wins the upcoming General Election, it is not clear whether the proposals will be reintroduced.



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