Lords to vote tomorrow on changes to probate fee system

A move that has caught the sector by surprise has been branded a stealth tax and 'a misuse of the fee-levying power'

The House of Lords is set to vote tomorrow on government plans to amend the probate fee system, which could cost charities £10m a year.

The order has been laid despite strong opposition from charities and lawyers and appears to have taken the voluntary sector by surprise.

Lord Keen of Elie, the government spokesperson for Ministry of Justice business in the Lords, will move that the draft Non-Contentious Probate (Fee) Order be approved.

Keen's Liberal Democrat and Labour shadows have put forward amendments to the order: the former's rejects it and the latter's says it arguably amounts to a stealth tax and is therefore "a misuse of the fee-levying power".

The Lords vote could be a significant milestone in long-running attempts by the government to reform probate fees.

Because the order is a statutory instrument, if it is passed by both the Lords and the Commons it could become law by April.

The current proposal is to abolish the £215 flat-rate probate fee and replace it with fee bands, in which estates valued at less than £50,000 would be exempt from fees and estates worth more than £50,000 would pay between £250 and £6,000.

Legacy experts have warned that this could cost charities £10m a year in lost legacy income.

Matthew Lagden, chief executive of the Institute of Legacy Management, and Rob Cope, director of Remember A Charity, were both unaware of the matter coming before the Lords this week.

Lagden urged the Lords to support an amendment rejecting the order from the Liberal Democrat peer Lord Marks of Henley-on-Thames.

"We hope this will give the government cause to pause and reflect on whether they are taking the right course of action," Lagden told Third Sector. "We think the fees are unjustified and too high."

Cope said: "The charity and legal sector seems united on this, so it's hugely disappointing that the government is going ahead with it. Let's hope it gets quashed."

The amendment by the Labour peer Lord Beecham says the new fee structure is "so far above the actual cost of the service it arguably amounts to a stealth tax and, therefore, a misuse of the fee-levying power".

Lawyers have claimed the proposed new fee structure is a government attempt to subsidise other parts of the court system.

Nicola Evans, charities counsel at the law firm BDB Pitmans, said: "I hope the House of Lords gives proper scrutiny to this draft order, which has been subject to very serious criticism by both parliamentary committees tasked with reviewing it, both repeating concerns raised only a year ago.

"If passed, this damaging attempt to introduce a new probate tax by the back door would cause significant loss to the charity sector, among others, and set a dangerous precedent for future stealth taxes."

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