Charity umbrella bodies have warned that the proposed changes to probate fee structures could be "detrimental to charitable giving" and have sought "urgent action" from the government.
Four charity bodies, Institute of Fundraising, Remember a Charity, the Institute of Legacy Management (ILM) and NCVO have written to the Ministry of Justice to express concerns about the plans to increase probate fees.
The government plans to abolish the £215 flat-rate probate fee (the cost of administrating a deceased person’s estate or will) and replace it with fee bands. Estates valued at less than £50,000 will be exempt from fees and estates worth more than £50,000 would pay between £250 and £6,000.
Charity leaders are concerned that when people leave a percentage of their estate to charity, the amount of money charities will receive will decrease, because of the increases in probate fees. They have said that 87 per cent of legacy income presently comes in this form, and not as a fixed sum.
“The proposed fee structure has unintended consequences that could be detrimental to charitable giving,” the letter said.
“While we understand that probate fees are an essential element of judicial funding, we are concerned that the cost is disproportionate.”
Alternative proposal
The bodies have called for a meeting to discuss a new approach.
They suggested that a reduction in probate fees for estates and wills that include legacy gifts “could result in a positive and welcome opportunity to promote and encourage charitable gifts in wills”.
“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,” they said.
Government response
Speaking in parliament yesterday, Lucy Frazer, parliamentary under-secretary of state at the Ministry of Justice defended the changes. She said: “Fixed sum charitable donations will be unaffected by the increase probate fees.”
She added that estates will pay no more than 0.5 per cent of their value in probate fees and that the changes will only affect estates where the deceased has left an entire estate or a percentage of their residuary estate to charity.
Sector bodies have previoulsy estimated that these changes could cost the sector £10m.
The Ministry of Justice also estimates that the changes will generate £145m in additional fee income for running costs for courts and tribunal services.
Frazer said that the government does not collect data regarding charity donations left in wills and so could not make an assessment about the overall loss for charities. However, she added that the ministry would “consider this assessment” if the body shares its data with them.
The changes to probate fees are planned to take effect from 1 April 2019.
|
Related articles
