Umbrella bodies make last-ditch attempt to halt probate reforms

The changes could cost the sector an estimated £10m a year

Four voluntary sector organisations have today made a last-ditch attempt to stop government reforms to probate fees that could cost charities an estimated £10m a year.

The Institute of Fundraising, the National Council for Voluntary Organisations, the Institute of Legacy Management and Remember A Charity have sent a joint letter to Lucy Frazer, the minister responsible for legal fees, suggesting an alternative proposal.

The proposal, first sent to Frazer in a private letter on 12 November, says the government should introduce a reduced or discounted rate on probate fees for estates that include legacy gifts.

The Non-Contentious Probate (Fees) Order, which ws passed by a committee of MPs by nine votes to eight last month, will remove the existing flat-rate probate fee of £215 and replace it with fee bands.

Under the new system, estates of more than £50,000 will pay between £250 and £6,000, with the maximum amount reserved for estates worth more than £2m.

The ILM has estimated this could cause charities to lose as much as £10m a year from legacies.

The statutory order is now due to be put to the House of Commons and, if passed, would become law within 21 days.

The new fee structure has generated considerable national media coverage because of its potential impact on estates.

Labour and Liberal Democrat MPs have indicated they will object when the order is put before the Commons, which could force a vote.

But the Commons has not annulled a statutory order since 1979.

Instead of relying on this, the signatories of the letter to Frazer are instead hoping the government will consider their alternative proposal.

Their letter says the government has done much to promote legacy giving and its new policy could undermine this by having the "unintended consequence" of reducing charity income.

It says: "If a reduction or discounted rate on probate fees were introduced for estates that include a legacy gift, this would have the effect of both reducing the financial impact on charities, as well as creating an incentive to leave a charitable gift in a will.

"We seek urgent action on this matter and hope to be able to meet with you to discuss this further."

An IoF spokeswoman acknowledged time to stop the new fee structure was running out and ministers' minds were fixed on Brexit, but there was still a chance of a breakthrough.

"It is a busy week in parliament, but this is an important matter for the charity sector," she said.

Nicola Evans, charities counsel at the law firm BDB Pitmans, said: "MPs have a lot to deal with at the moment, so it will be disappointing if the Ministry of Justice presses ahead with its proposal, heedless of the overwhelming criticism and the unwarranted loss to the charity sector.

"MPs would then have to break away from their consideration of Brexit in order to oppose this attempt to introduce a new inheritance tax by the back door."

A spokesman for the Ministry of Justice said the department would respond to the letter in due course. 

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