Could death tax hike be blocked after all?

LABOUR will attempt to block a controversial hike in probate fees, labelled a ‘stealth tax’, by forcing a Commons vote on the issue.

Next month’s rise could cost bereaved families thousands of pounds, but it was effectively waved through last month after Government ministers categorised it as a ‘fee’ rather than a tax – meaning it would avoid full Parliamentary scrutiny.

However, a Labour source confirmed yesterday that the party will now move to force a Commons vote on the issue and oppose the changes.

The new fees for administering probate – the legal authority to take control of someone’s finances when they die – will rise next month from £155 to as much as £6,000 depending on the size of the estate.

This represents an increase of 3,770 per cent for an estate worth £2million or more.

Labour MP Valerie Vaz has said there should be a debate as the Government is acting beyond its legal authority.

‘It cannot be a service charge, because it is graduated, depending on the size of the estate,’ she said.

The Ministry of Justice has denied the charges are a tax and said they would help plug a shortfall in the cost of the courts service. The hike is expected to rake in an extra £185million a year by 2022-23.

Officials insist the sliding scale of fees cover the cost of the service. Yet critics say they bear no relation to the actual cost of probate.

James Badcock, partner at law firm Collyer Bristow, said: ‘At the higher end of the scale the fees are far greater than the administrative costs for which they are charged.

‘The higher fees will result in beneficiaries of wills receiving less, including charities.’

Former pensions minister Steve Webb, of insurance firm Royal London, said: ‘The Government should not be using a backdoor procedure to smuggle the increases through.’

And Sally Ashford, partner at law firm Charles Russell Speechlys, said: ‘It is hard to justify as the work is the same regardless of estate size.’