Death tax looks set to die a slow death

bands were to be brought in relating to the value of the estate – under £50,000, no charge; £50,000£300,000, £300; £300,000-£500,000, £1,000; £500,000-£1 million, £4,000; £1 million-1.6 million, £8,000; £1.6 million-£2 million, £12,000; and more than £2 million, £20,000.

It was estimated that more than half of estates would pay nothing and 92 per cent no more than £1,000. However, for some, it was going to mean 129 times the current level.

So, a couple with an estate of £1.5 million, owning their own home, already potentially liable for up to £260,000 in inheritance tax (IHT), could have faced an extra two x aim was to help offset the £1.9 billion a year it spends on the courts service. The new higher fees would have provided £320 million. Fees in other areas contribute about £700 million.

What particularly irked was the lack of consistency. The agency that deals with powers of attorney, the Office of the Public Guardian, is a quango, so cannot make a surplus, and indeed recently reduced fees for registering Lasting Powers of Attorney to prevent this happening, whereas the probate system is a Government department, able to make a surplus, so can increase their fees.

The change was to be enacted through an Executive Order not requiring a Parliamentary vote, but the Government decided there was insufficient time to push it through.

A spokesman for the Ministry of Justice said the matter would be for the new government to decide. He would not comment on whether the plans would be abandoned long term.

As to the possibility of a Labour government, unlikely as that may seem, it might view the idea as a tax on the wealthy and therefore a welcome boost to the spending coffers. Who knows?

Fingers crossed that this is the last we hear of the probate tax, but I wouldn’t entirely rule out its return in new clothes at some point along the political pathway.

No wonder so many MPs were upset on behalf of their constituents

Trevor Law is managing director of Merito Financial Services, chartered financial planners, based in Solihull. Email:tilaw@meritofs.com