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'Death tax' probate fee hike faces major setback

The policy labelled by many as a death tax could be delayed or even reversed, as MPs press for parliamentary voice.

'Death tax' probate fee hike faces major setback

The government’s plan to introduce dramatic increases in probate fees was struck with a major blow yesterday, as MPs questioned whether it could be introduced without the consent of parliament.

Expected to come into effect in May, the probate fee increases sees the current flat rate (£215 or £155 if using a solicitor) replaced with a banded structure where fees increase in line with the estate.

This banded structure, which starts at £50,000, means those with assets of over £1 million will have to pay probate fees of between £8,000 and £20,000.

The move was widely criticised when it was announced with many quick to label it a death tax in all but name.

However, according to a report in the Times, the policy suffered a severe setback yesterday as MPs on the statutory instruments committee said the changes have ‘all the hallmarks of taxes rather than fees’ and so the policy could break the principle that all tax changes must go through parliament.

As the changes are due to come into effect next month, forcing the policy to go through the House of Lords and the House of Commons could lead to a delay in its introduction.

Tory MP Jacob Rees-Mogg told the Times it would be difficult for the government to go ahead with the changes now.

‘This is very good news,’ he told the paper. ‘I think it would be very hard now for the government to proceed with these proposals. They always seemed to amount to a stealth tax.’

The increase in fees was going to be used to raise £300 million to the courts and tribunal system.

The Ministry of Justice told the Times: ‘Our plans to introduce new probate fees remain unchanged. We will introduce a fairer system, meaning over half of estates pay nothing and over 90% pay less than £1,000. They will be considered in parliament after Easter and come into force as soon as possible.’

26 comments so far. Why not have your say?

Norman E

Apr 06, 2017 at 11:17

Time for everyone to get hold of their MP by the scruff of his neck and tell him what you think of this tax.

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Alan Selwood

Apr 06, 2017 at 12:48


The whole business of dying is getting messier and messier (like pensions).

The IHT rules and exemptions are far too complicated, and it is already bad enough for very large sums to be required upfront to pay an IHT bill before being probate is granted.

To make the executors also find £10,000 (or even far more) just to lodge a probate application is plain ridiculous. Since banks and airlines have been pressurised into reducing credit card fees to a level representing real costs, why should the same not apply to probate fees?

Better still, dump IHT as a tax altogether, and charge probate fees at actual cost.

Then get rid of CGT and stamp duty, and merge National Insurance into income tax.

So much bureaucracy would be removed both within government and outside that costs would come down dramatically, causing less impact on resulting income tax and VAT increases than would otherwise be necessary.

Keep it Simple, Stupid!

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Apr 06, 2017 at 13:44

Hear hear, Alan. But even if the rest of your list is too much to ask, at least let's kill off this probate fee heist. If they want to raise tax, raise tax but to pretend that these payments bear any relation to the cost of Probate and pretend it's a 'fee' is a nonsense. Those sufficiently vexed by it may be interested in this petition -

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Apr 06, 2017 at 14:42

I am all for less bureaucracy, but being simple can also be being stupid! The Government is already expecting to spend £60BN a year more this year than it raises in taxes. If you cut these changes out, it will either need to borrow even more or cut services further. The trouble is the favourite nostrums such as a further squeeze on working age benefits just simply won't raise enough. The three big ticket items left are (in this order) - the State Pension plus the other benefits for the 65+; the NHS and Education. The fifth biggest is debt interest which is £46BN a year. Each 1% rise in interest rates will ultimately work through to cost £17BN a year extra just on the current debt levels. They are bound to go higher.

Given that the changes mean that all estates under £50k (the large majority) will pay nothing at all, the cry of anguish can be interpreted by those outside London and the SE as simply another case of the wealthy and the well off expecting others to pay for their privilege. In any event if you keep as much as possible in your pension scheme you can still avoid both IHT and Probate fees as this money is not counted as part of your estate.

As for merging NI and Income Tax - great idea but it won't happen for the simple reason that we pensioners currently get a lower tax rate than those in work. Given the average age of Conservative party members I doubt whether this Government will risk alienating this group or pensioners generally by getting them to pay more income tax. Be careful what you wish for.

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Apr 06, 2017 at 14:48

I wrote to my (Conservative) MP to protest when it was announced that these outrageous increases were to go ahead despite overwhelming opposition during the consultation protest. She replied that she thought the proposals were fair. Having spent several stressful weeks dealing with my late husband's probate application (over 80 pages of guidance notes to plough through for starters) I feel I should be the one getting paid a large fee. Don't forget that where all assets are jointly owned, no probate is required, so no fee at all, however large the estate but if you have opened the odd ISA,which can't be held jointly, not only do you have a heck of a lot of work but you will get clobbered for a large fee as well, even if no IHT is payable because all is going to the spouse. Call that fair? I call it idiotic, as are many other of our tax laws.l If they stopped wasting money on vanity projects and ill considered schemes, they wouldn't need to fleece the same people several times over on the same money. Should we really be funding girl bands in Somalia (or wherever it was) and umpteen corrupt foreign organisations? Do we really need HS2 or a garden bridge across The Thames? Should we be lending mobile phones to convicts on bail and letting them run up bills of over £4k at public expense, etc? This was a reasonable fee, not long ago increased, and should remain a fee for a service (where the applicants do most of the work) not turned into yet another tax.

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Apr 06, 2017 at 15:02

Where is the privilege in having to pay a fortune for a grotty semi in the south when you could buy a fab. detached in the north for the same money? And why should the capital in a drawdown pension not be treated as part of the estate (and left to heirs free of IHT) when those who did not have access to a pension scheme but saved from taxed income into ISAs. do have these counted as part of their estate? I don't think that is fair either, when pension contributions get tax relief on the way in. The really wealthy could leave their pension funds untouched and live on their other investments, thereby reducing their taxable estates and leave pension funds for their heirs, not an alternative for those who bought an annuity as did my husband after the Equitable Life debacle.

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Apr 06, 2017 at 15:35

The trouble is no-one like paying tax and anyone who is asked to pay more is likely to feel it's unfair. Yes the tax UK code is more complicated than it needs to be, and yes there are lots of anomalies. These are often compounded by the decisions people have taken without thinking through the longer term implications or getting advice. Paying money into ISAs rather than pensions I am afraid falls into that category. And the decisions avoided - its a sad fact that many people still don't even bother making a will causing even more problems for surviving partners.

And because its complicated, every time a change is made there tends to be winners and losers.

Anyone living in an unmortgaged house in a high cost area has several options - you don't need to be wealthy (and how do you define really wealthy) to be able to re-arrange things in a way that reduces the probate and IHT bills. For most people living outside the housing bubble that is London and the South, an estate that comes near the IHT limit is unimaginable.

The fact is that for over 80% of estates the new charges will mean less or slightly more than the fees that apply now. No estates will pay more than 1% in probate fees. By definition those who pay more will be in that 19% group. While my estate will be among them, I recognise that the majority will be better off.

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Apr 06, 2017 at 15:55

Could you please spell out those options in para three, horshamtim. I think I may be missing a few tricks.

As I said, not everyone has the option of paying into a pension scheme. I certainly didn't. It is only recently that all companies were obliged to offer them and I'm not sure that applies to very small businesses even now. At 80 I believe all pension doors are closed to me.

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Apr 06, 2017 at 16:35

It's a hobbyhorse of his which I have picked him up on before, bouleversee. Whilst theoretically possible if you'd organised your affairs the way he suggests - starting many years ago and with the lack of certainty that arises from persistent Government changes to the tax and pension system - it relies on that old Irish joke, "Well I wouldn't have started from here.......!"

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Alan Selwood

Apr 06, 2017 at 23:27

"The trouble is no-one like paying tax and anyone who is asked to pay more is likely to feel it's unfair. Yes the tax UK code is more complicated than it needs to be, and yes there are lots of anomalies. These are often compounded by the decisions people have taken without thinking through the longer term implications or getting advice. Paying money into ISAs rather than pensions I am afraid falls into that category."

How exactly can one make these decisions that you think everyone should have made if the government keeps changing the rules and the goalposts, though, horshamtim? Too much hindsight is being used for this to be a valid comment.

At least you agree that the whole tax system is far too complicated.

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Norman E

Apr 08, 2017 at 10:19

No reply from my MP (Huw Merriman) to my e-mail!

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Apr 08, 2017 at 10:30

My MP said she thought it was fair and hasn't replied to my email emphasising why it isn't fair at all. Local elections coming up. Perhaps we should ask councillors what their views are so they feel some pressure.

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Apr 09, 2017 at 12:26

Once a upon a time I thought that the comments posted on financial sites such as Citywire would be from serious investors who has some understanding of financial and economic matters, basing what they said on evidence rather than prejudice. Sadly that has proven optimistic.

And in many cases the original article gets quickly forgotten, which in this case is essentially whether the new probate charges are fair. 58% of estates will now pay nothing when currently they pay £215 (£155 if using a solicitor but then expect a bill of £200+ an hour if they do it for you). A further 23% will now pay £300.. A further 6% will pay £1000 on an estate valued up to £500k. If you look at the new scale nobody will pay more than 1% of their estate, and the very large majority won't even pay that.

The current arrangements require someone with an estate of £10k to pay the same amount as someone with an estate of £1m or £10m etc. So the for the vast bulk of the UK population the proposed arrangements are obviously much fairer, and the charges more in tune with the costs associated with the court fees in scrutinising larger and more complex estates. You can argue that the sliding scale could be made fairer still, but essentially those complaining simply because they will now have to pay more (or more correctly pass slightly less of their estate on to their beneficiaries) really don't have much of case in terms of the overall burden of the new charges.

And we should not lose sight of the wider issue that some way, somehow the Government has got to try and close the gap on its need to borrow large amounts of money. Inevitably much of this will fall on those with assets rather than those without.

I don't like making such posts personal, but given the attacks let me respond.

I don't have hobby horses, nor do I give advice - but when people blame the effects of their own lack of planning on others I try to explain what I and many others have done to legitimately reduce our IHT bills and manage our financial affairs. The structure of IHT has not changed for many years, and the ability to use trusts and pensions as alternative investment vehicles have also been around for many years. Those who think it sensible to rely on having the bulk of their assets tied up in an unmortgaged home in an expensive area clearly do not have much understanding of the principle of diversified asset allocation. To then complain about the effect of IHT is akin to standing in the middle of the railway line and to consider it unfair when the train hits you.

So I made the choice of moving out of London during a previous boom and over the last 15 years have used pensions and ISAs to invest. Despite being a pensioner I run a mortgage still - I could pay it off, but this is one means of reducing the size of the estate. In any event given that my investment returns average well into double figures, it would be pretty daft to pay off a mortgage set at 2%. With the new IHT allowance it is anyway possible to shelter up to £1m between a couple by 2020, and less than 2% of estates are above that. Yes the rules on these things change, but this is exactly why it is sensible to have a diversified portfolio of assets and to keep up with both the threats and opportunities.

I have explained all this before but it appears to have gone over Jeffian's and others heads. And Alan - this is not about hindsight it is about choices and steps which any serious investor will have worked out for themselves, or been advised on.

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Norman E

Apr 09, 2017 at 15:11

To me, the whole problem is that what was a fee for a service has now been changed into a tax based on value. In addition it will now get a double hit on an estate where one spouse dies first then the other. Estates left to a spouse pay no Inheritance tax, but now a fair sized estate could cost a widow or widower several thousands. Its a stealth tax that needs a parliamentary debate.

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Apr 09, 2017 at 20:04

Two points in response to horshamtim -

1) As Norman E says, the issue isn't specifically about whether it is 'fair' for £2m+ estates to be charged £20,000 for a simple administrative Probate fee, but whether the 'fee' bears any relation to the service provided. If not, it has all the hall marks of a tax and should have emanated from the Chancellor via the Finance Bill after proper scrutiny in Parliament, not arbitrarily imposed by the Ministry of Justice. To add insult to injury, I believe (but not sure) that it will not even be allowed as an expense of the estate to be deducted before calculation of IHT thereby incurring double taxation.

2) I'm sorry he regards me and other contributors as a bit dim but if he remembers our previous exchange about his claim that IHT was 'largely optional', it wasn't that his explanation went "over my head" but that it was unrealistic and impractical for many people. We're all different, I know, but as the idiot sitting in an unmortgaged London home which alone puts me outside the proposed main residence nil rate band, I just don't see the decision to move away from a much-loved family home of 40 years in an ideal location to something less in an area I don't want to be as something to be seen in terms of "the principle of diversified asset allocation"!

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Apr 09, 2017 at 20:28

Quite right, Jeffian. The fact that some people may avoid the new tax by making lifestyle choices like moving far away from their nearest and dearest at a time of life when they are likely to become increasingly dependent on them to an unknown area where they may be very lonely and unhappy doesn't make what is obviously a new tax fair. How many times should the same money be taxed? And in any case how can anyone plan for unknown future events? Try taking out another mortgage when your existing one is paid off when you are already quite old and in any case why should savers/taxpayers subsidise Horshamtim's unnecessary mortgage? What he is saying is that he considers the new tax fair because he has managed to avoid it. Depending on how old he is and how long he continues to live and how successful his ISAs etc. are, it may yet come back to bite him. I find his remarks insulting. Tnis new tax is clearly very unfair since not all people with equal estates will pay it and it is only progressive up to a point. I hope Parliament will have the good sense to vetoe it.

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Apr 10, 2017 at 15:33

Extending the discussion beyond simply the probate fee issue (which is yet another example of piss poor policy), the biggest problem is Government now appears to operate on the basis of hiding as much as possible from the electorate by sneaking things in via the backdoor.

Democracy in action - a shining example to all those aspiring nations we love to tell how they should run things.

Any other industry / Company trying to do something similar would cause an outrage ... with no doubts calls for individuals to be called before parliament to explain their underhand behaviour.

If they want more money then raise the headline taxes, whether it be IHT or income tax and be open and honest about it, if we the voting public don't like it we well tell them in no certain terms come voting time. Too many career MPs that appear to care more about themselves than actually running the Country in the best way.

Yes I hate taxes and I do my best to avoid them, sorry naughty word these days ... what I meant to say was I mitigate them as aggressively as I can. But I hate bad taxes even more.

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Apr 10, 2017 at 16:30

Hear hear!

It is self-evident that the Government need to raise taxes (look at the deficit!). A recent study by the Institute for Fiscal Studies suggests that almost half the population pays no incomes taxes at all whilst the top 1% (just 300,000 people) pay 27.5% of income taxes. Clearly, you can only get more money from those who have it but, as PL says, at least be open about it. And that also brings us back to Alan Selwood's suggestion of a single Flat Rate tax covering everything - no exemptions beyond a personal allowance set at the living wage - so that everyone clearly sees and understands the costs if they want additional public service. If you have no ownership or responsibility for the provision of public services, you'll happily vote for anything you are promised if you don't think it will cost you anything!

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Alan Selwood

Apr 10, 2017 at 23:23

This weekend, I saw a financial article that said that several taxes (including CGT and tax on investment income) should all be abolished, because they are taxes on what has already been taxed, and that the principle of double taxation is wrong.

I have to say that much as I think he usually talks a lot of sense, in this series of posts it is unfair of horshamtim to say that people should have taken account of the financial situation and planned in advance to avoid the 'unnecessary' burdens of taxation, when one of the really big and serious problems is that the government (of any persuasion) seems to think that its most important role is to fiddle, move goalposts, and effectively make it impossible for anyone to carry out proper planning.

So I believe that rather than argue about our relative abilities to outguess the politicians, we should aim to make them simplify the whole tax system, get rid of preconceived and pernicious notions about micromanaging under the guise of fairness or redistributing benefits and taxes in accordance with the vociferous nature of lobbyists or the politicians' own prejudices.

We need a simple, transparent and realistic tax system, where the size of the problem is clear in financial terms, the method of division among the population of benefits and taxation also clear, and the taxes themselves centred upon just two areas : tax on consumption (VAT) and tax on income (Income tax). In this way, both rich and poor pay roughly according to the means and benefit according to their needs. The detail of the balance comes from the tax rate set for each. Everything should be based on the costs of solving the problems in the most efficient way, whether this is at the level of probate fees (NOT probate taxes!), public health or keeping the destitute from starving or educating future generations.

Rather than offering 'bread and circuses' to the masses, politicians should act like adults and tell it as it is. They should show clearly that people need to be prepared to pay taxes to cover the costs of services that the electorate needs, and certainly not think that 'the State will provide'. They should also be prepared to take the State out of areas that individuals can do more effectively, while retaining those areas where national interest and economies of scale can be better for all.

Finally, the taxes need to be fair, not attempts to knock those of different persuasions from one's own. Politicians need to become statesmen, managers not illusionists.

Rant over!

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Apr 11, 2017 at 11:01

I agree with 99% of that, Alan, with the exception of "the taxes themselves centred upon just two areas : tax on consumption (VAT) and tax on income (Income tax)". If you swept away all capital taxes and amalgamated IT and NI, I believe that the rate required to raise the necessary tax would be unacceptably high. It would also tempt people to seek to convert taxable rewards (income) into untaxed capital gains. In my opinion, the system required to make a simple Flat Tax work is to include ALL receipts in any year, including for example income, capital gains, share options, inheritances and even, dare one breath it, property gains made on one's Principal Residence. Provided the rate is not penal, most people would accept it if they could see they would retain the major share. It also means that taxes would be raised from actual cash in the hands of the recipient rather than notional sums from those who may not have the ready cash available! For example, it seems a nonsense to me that the purchaser of a house has to find up to 12% Stamp Duty on top, whilst the recipient of the sale proceeds, which may include a very substantial capital gain, pays nothing. My model would set a 'living wage' up to which nobody would pay any tax (what's the point? You'd only have to pay it back in benefits) with every marginal penny above, from whatever source, being taxed at a flat rate. This would allow the state to sweep away all the (expensive and inefficient) paraphernalia of allowances and benefits with the proviso that there would have to be some sort of safety net for those who are unable to provide for themselves.

You and I know this is never going to happen because politicians simply aren't 'brave' (in the Yes Minster sense) enough to move away from the default position of offering everything to everybody for fear of losing a vote somewhere, but it would be great to have an adult public discussion about it!

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Apr 14, 2017 at 13:27

This conversation has clearly touched some nerves. My stance remains that the new probate fees are essentially fair - and remember that before 1999 we had a sliding scale based on the size of the estate. The move to a flat rate system was unfair on all those - the large majority - who had smaller estates. Otherwise those with the large estates are in essence saying they want someone else to pay for our courts system. 58% of all estates will now pay no probate fees.

It's also fair for the majority of owner-occupiers - as of February this year the average value of housing across the UK was about £240k (Land Registry completed sales). Take out London and the SE, and this average figure drops significantly. This means that most such estates including unmortgaged properties elsewhere will be comfortably within both the IHT threshold and the £300 probate fee band.

So it is about choices and is often about planning in advance - I don't think this is an unfair comment to make. While I agree that rules change, those relating to IHT have had a predictable effect for many years. I did two things - I moved out of London (actually closer to some of my nearest and dearest) and have ended up with a nicer house in a SE market town with access to London at less than half the value of my last house in London. Having put all the kids through uni etc., for the following 7 years until I retired I stuffed all the spare cash into personal pensions. As a higher rate tax payer this was effective, and this moved all of those assets into a shelter that was both outside the calculations for IHT, and also outside those of Social Services should I need care at some point. The point about the mortgage angle is that it is the equity in the house that matters not its value - so this gives you a tool to fine tune where your assets are. Equity release schemes can do something similar.

As it turns out it has also reduced my probate fees but this is small beer by comparison - however I will still pay more under the new scheme. These are all personal choices and it remains my view that we should try to take the key decisions consciously, and accept the consequences. I have no wish to end up aping those annoying children in the playground who are perpetually saying "it's not fair". Life isn't and anyway as this conversation has shown the fact that something impacts adversely on you does not automatically make it unfair.

Not everybody will be able to take such decisions, but there are opportunities there. And for someone who has a large value house, to stuff spare cash into ISAs rather than pensions, as things stand are just making things even worse for themselves.

And I hope that at last Jeffian now accepts that IHT is largely voluntary - even with the current pension LTAs it is possible for a couple to shelter up to £2.85m, more if you have crystallised any pensions when the LTA was higher. The figure will rise to £3.6m by 2020 due to the new residential IHT allowance. That represents about 99.8% of all estates. I am grateful to all those unwitting volunteers - as long as many estates keep paying it, it reduces the chances that a new tax will come along that I don't like so much!

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Alan Selwood

Apr 15, 2017 at 19:04

A probate FEE, to be fair, should cover the costs of the service. The latest changes are a TAX masquerading as a FEE. This is what I and many others object to.

Those who have a large pension scheme that can stay tax-free for the next generation are more fortunate (or lucky) than those whose pensions had to be taken as an annuity before the rules changed.

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Apr 15, 2017 at 19:47

A shorter and more concise answer than I would have given, Alan, which was why I didn't!

As for IHT, no I cannot accept that it is "largely voluntary". Yes, it can be mitigated to a certain extent but only "largely" if you are prepared to make decisions which reduce your circumstances and lifestyle choices which you would not otherwise make. As with investment, the tax tail should not wag the dog. horshamtim's solution seems to be simply a matter of downsizing his Principal Residence and stuffing the rest into pensions. The former is not attractive or acceptable to me and the latter was not available to me, certainly not to the levels he suggests. Anyway, in deciding to put most of his eggs into the pension basket years ago, he cannot have foreseen the recent pension freedoms, so I would say that was more luck than judgement!

Finally, I can accept the fact that he thinks I am a sap for paying his Probate fees and will no doubt end up paying more IHT than him (as did my father in 1987 and my mother last year - we've done our bit for the UK economy!) but, having spent the past 4 years organising privately-funded live-in care for my dear old demented mother, it slightly sticks in the craw to hear him smugly talking about moving his assets "outside those of Social Services should I need care at some point". Well, we've all heard about the state of social care so I wish him well with it. I'm sure he'll get the care he deserves.

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Apr 15, 2017 at 21:58

You may end up subsidising his care home fees as well, Jeffian, since you would be paying more if self-funding than the local authority pays for those who qualify for assistance. Having just listened to this week's Money Box (The Care Fee Trap" and Money Box Live (Care Home Costs for Dad), I'm rather hoping the smug b******d has put his assets into one of those trusts mentioned in he programme. Does he have no conscience? The reason some of us have to pay so much is that so many go out of their way to avoid paying anything at all for the care which most people will need at some point. Where does he think that money can come from? It's not fair that those who have the misfortune to be afflicted with an illness which makes them require care should lose all their money while those who are lucky not to need institutional care should pay nothing at all. If I fell into the latter category, I should be more than happy to pay a limited sum to contribute to the care of the former. There should at least be a cap or a national insurance scheme we all have to pay into to spread the risk. I don't know why the government is dragging its heels about this.

My own parents were both in homes for over l6 years and had almost nothing left by the end of that time, having started with quite a lot of money.

All I can say to Horshamtin is that there are none so deaf as those who don't want to hear. The trouble about your last sentence, Jeffian, is that because so many are no paying anything, the standard of care that those of us who do pay will get will be no better since the self-funding are in the same homes as the freeloaders and get no better care and my experience is that if you opt for care at home, the standard of care leaves a lot to be desired. . The whole system is going to collapse.

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Apr 16, 2017 at 12:12


If you read my last two sentences again, I think you will find that they cover your point!

I agree that the whole system looks bound to fail - from 'care in the community' for mental health (just a reason to close costly residential mental institutions I suspect) through to the current crisis in looking after an ageing population. It won't chime with many, but I feel that part of the solution is for those who are able to take more responsibility for their own families. I'm sorry your experience of care at home was unsatisfactory. My own experience is that this is by far the best solution if circumstances permit and the key to quality is to find a good agency and understand their staff selection, qualification and training processes. (The excellent agency we eventually chose said that I was the only client who had ever taken the trouble to interview them and inspect their office and facilities!). If forced to go into a care home, choosing one that does not take Local Authority-funded clients should deal with the issue of fee 'subsidisation'. Let's hope horshamtim's children feel the same way!

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Apr 18, 2017 at 13:38

Pity a serious article had to descend to personal abuse, simply because I challenged some of the statements people were making. Sadly that says more about them than me.

Alan - on the evidence the money expected to be brought in by the new Probate fees is less than the total cost of the service - it would only be a tax if it raised more. Up to 1999 Probate fees were organised on a sliding scale according to estates, and we are simply returning to that approach. In essence the probate service has been subsidised by general taxation ever since. Personally I think it is fairer that the users of such services should pay for them, and I certainly don't think people without much if anything to leave should in any way be paying for much larger estates.

Those who want the fee structure to stay as it is are saying they want people with less then £50k to leave to subsidise their larger estates. I still can't see the fairness in that, and I suspect none of that group would either. I note that none of you have been able to put up coherent arguments against that point.

Jeffian- none so blind, and still making comments that are both incorrect and irrelevant. The pension freedoms since 2015 have had a limited effect on the argument - drawdown has been available since 1995 and money put into them has been outside one's estate since that time. Since 2006, the requirement to annuitise at age 75 disappeared. All it requires is to nominate your beneficiary through an expression of wish to avoid the money coming back into the estate. For anyone who has taken an annuity since 1995, this has mostly been a choice, not a necessity. One device was to split the pots then, annuitise some for a base income and put the rest into drawdown, to get the best of both worlds. For those who had to go into annuities before 1995 (so at least late '80s now), I agree the choice wasn't there - but then you were getting about £15k annuity for every £100k, as against about £5k now for a 65 year old. You will have more than got all your money back!

Yes the recent pension freedoms are a bonus to some, but as I have no intention of taking out huge lumps, no real change for me, particularly as I could live within the capped drawdown limits that existed previously. No I haven't put all my eggs in one basket - I manage my estate within the relevant limits - which is why I will be paying higher probate fees. I am not expecting anyone pay my fees - my estate will be that much smaller and simpler to manage.

So Jeffian not luck but thinking about the future and planning accordingly. It feels like a large element of sour grapes on your part. Its not too late to take some of this points on board but it seems unlikely that you will do so. Obviously if people want to live in a large under-occupied and unmortaged house in an expensive area that's up to them - but it is a choice, and there is really no excuse for saying later that the obvious consequences are unfair.

No I am not expecting others to pay for my care nor did I say this - I hope that I don't need it - but the size of my estate will mean I will have to pay for this for more than the average stay, and I will certainly not want to rely solely on LA support. Again this is an issue which will affect a sizeable proportion of us at some point, and it is sensible to think about how to organise things so that there is still money that can be passed on to your children. Leaving it until care is needed is too late. There always have been ways of legitimately reducing the bills.

I don't think I am smug - I set out what I have done and why simply because others tried to suggest it was all theoretical or was down to luck rather than planning. Most of what I have done is open to anyone else who either has a lot of capital tied up in their home, or who is able to use the ability to move money into pensions (the annual allowance is still £40k a year). There are other mechanisms which go further than I have indicated, but are probably out of reach for most people.

The funding of the care home system may well collapse, as indicated self funders are indeed subsidising those paid for wholly by LAs. About 250 homes a year have been closing over the last 6 years, and there are growing signs that providers will cherry pick the better-off regions. In the absence of substantial extra public funding (and therefore taxation) there is no real prospect for change. This is one of the many issues that would benefit from a long term cross-party consensus, but good luck with that.

A failure to plan is a plan to fail.

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The Expert View: Lloyds, Persimmon and Whitbread

by Michelle McGagh on Apr 26, 2018 at 05:00

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