Tories scrap plan to hike death tax

... as there’s not enough time before election!

PLANS to levy fees of thousands of pounds on grieving families were axed last night.

Theresa May cleared the decks for the election by jettisoning a huge rise in probate charges that had infuriated MPs and risked being a major campaign issue.

The move, which would have taken fees from just £155 to as much to £20,000 depending on the size of the estate, was announced in the budget last month. The Treasury stood to gain an extra £1.5billion.

But in a dramatic U-turn last night, ministers axed the scheme, saying there was too little parliamentary time before the election to push it through. The decision comes just weeks after the Government scrapped plans to raise national insurance on the selfemployed, following a backlash from MPs and the public.

‘The statutory instrument on probate fees won’t have time to complete its passage through Parliament so it will be a matter for the new government,’ said a spokesman for the Ministry of Justice. He would not comment on

From the Mail, March 27 whether the plans would be abandoned long term.

MPs hailed the announcement as ‘good news’ last night, having warned that the planned increase was a stealth tax. Almost all bereaved families have to apply for probate in order to administer their loved ones’ finances when they die. There is a set £215 application fee.

But instead of charging a flat fee, the Government had planned to bring in a sliding scale based on the value of the assets of the person who died – ranging from zero for those worth less than £50,000, to a £ 20,000 charge for those estates worth more than £2million. Around 2.5million people in England and Wales own properties worth at least £300,000, meaning huge numbers of households would have faced bills of at least £1,000.

Most would have been relatives of older people who lived in the south of England, where house prices have soared. The plans were announced by George Osborne last year.

MPs had urged embattled Justice Secretary Liz Truss to delay the proposed rise after it emerged that the new fees might be unlawful.

Baroness Meacher, a crossbench member of the House of Lords who sits on the committee, said last month that the planned rise was a tax. ‘You don’t just increase a fee by nearly 13,000 per cent – and the Lord Chancellor is not permitted to impose a tax,’ she said.

‘It is also a serious social justice issue. Probate is an unavoidable fee and lots of families won’t have that kind of money lying about. It can take months and months for money from an estate to come through and the fees have to be paid up front.’

In March, Chancellor Philip Hammond abandoned an increase in national insurance for self-employed workers that was proposed in the budget.

Last night, solicitors said they were delighted the probate move had been dropped.

Lakshmi Turner, of Solicitors for the Elderly, said: ‘It was very clear from the offset the new system was nothing more than a backdoor tax and the Government had abused its powers in pushing it through under the guise of a fee.

‘To call the new system “proportionate” was ridiculous when you consider that some larger estates were set to see a 13,000 per cent increase.

‘ By proceeding with the changes, ministers point-blank ignored the views of almost every respondent involved in the consultation process.

Budget documents show that by 2022 the Government would have earned £350million a year from probate fees. Under the current system it makes just £45million.

The £215 flat fee applies if probate is applied for by friends or family. It is £155 if a solicitor does the work.

THE flagship Tory pledge to slash net immi- gration to the ‘tens of thousands’ will again be in the party’s manifesto, Theresa May indicated last night – even though the target has been missed for seven years in a row.

The Prime Minister ended days of speculation about the fate of the pledge, saying she was committed to reducing migration levels to ‘sustainable numbers’.

Several Cabinet ministers including Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd had privately urged Mrs May to water down or abandon the promise, warning there is little prospect of it being delivered any time soon.

But Mrs May, who failed to meet the target during her six years as home secretary, is said to believe keeping the target will maintain the Government’s focus on bringing down numbers, even if the goal is not achieved for years. Tory strategists believe the policy will also turn the screw on Labour leader Jeremy Corbyn, who has said he wants no limit on migrants.

Mrs May appeared to leave the door open to a climbdown on Wednesday when she ducked questions about whether the pledge, made by David Cameron at the 2010 election, would be included in the new manifesto.

Culture Secretary Karen Bradley, a close ally of the PM, then hinted the manifesto would contain no specific target. She said: ‘What we need is to attract the brightest and best. It’s not about putting numbers on it.’

Ministers have been told not to confirm or deny the possible contents of the manifesto, due to be published in the next fortnight.

But Tory insiders insisted claims the target would be dropped were a ‘red herring’ and last night Mrs May moved to stamp out speculation that it would be abandoned.

Speaking during a campaign visit to Enfield, in London, she said: ‘We have been very clear that it is important that we have net migration that is in sustainable numbers. We believe sustainable numbers are the tens of thousands.’

Net immigration to the UK stood at 244,000 a year when Mr Cameron set the target. But, despite numerous initiatives designed to bring it under control, the Government has never got near meeting the pledge.

The most recent figures show net immigration standing at 273,000 – higher than when the target was set, although lower than the peak of more than 330,000.

Mrs May believes Brexit offers an opportunity to reduce immigration by clamping down on the numbers arriving from the EU, who currently enjoy free movement rights. But ministers have indicated it could be several years before free movement is ended.

And Brexit will make no difference to the numbers arriving from outside the EU, who make up roughly half the total.

Senior ministers have urged Mrs May to make the task easier by dropping foreign students from migrant figures, which currently cover all those staying in a country for more than a year. But the Prime Minister has refused, insisting it would destroy public trust. Mrs May’s spokesman said there would be ‘no change’ to the rules.