Lying toads

Legal experts have accused the Government of sneaking in a new “death tax” by the back door without proper parliamentary scrutiny.

New rules will mean estates worth £2m or more pay £6,000 in probate fees, up from £155 currently. The 3,770pc increase is a reduction on the original plans, which would have meant a bill of £20,000 for the largest estates.

A “grant of probate” allows the executor to access and distribute someone’s estate when they die.

The fiercely unpopular changes have been dubbed a “stealth death tax” and a de facto increase on top of existing inheritance levies (IHT). Experts have now warned that the probate fee structure will not be thoroughly debated in Parliament, as any other tax rule changes would.

The changes are expected to be introduced in April 2019, but the rules already form part of the law, it has emerged.

Making use of a parliamentary procedure called a “negative statutory instrument”, the Government is able to write the changes into law without debate.

The procedure dictates that an amendment is made to existing legislation on the day it is announced and remains so unless a motion to reject it is agreed within 40 days.

Given the use that is made of these things – despite the entirely true case that they have positive uses – perhaps it’s time to abolish SIs altogether?

Further, the best argument against more government is what government currently does.

6 comments on “Lying toads

  1. The fiercely unpopular changes

    This phrase could literally be applied to almost any government policy, or anything at all. You can always find a few people who will intensely dislike something. Given that I had not heard of this before reading this article, I reckon the fierce unpopularity is in direct proportion to people with £2m+ estates or those likely to benefit from them.

    As I’m still paying a 40% tax rate frankly I’m struggling to even raise a ‘meh’ over this, fierce or not.

  2. I don’t think it’s a question of approving or otherwise an underhand government action on the basis purely of whether it effects one personally.

  3. There’s something I don’t understand, Tim. This. The Brexit fiasco in the post above. Yet yoiu’d still trust government with a Carbon Tax.
    Inexplicable

  4. @Rob, November 15, 2018 at 10:34 am

    As I’m still paying a 40% tax rate frankly I’m struggling to even raise a ‘meh’ over this, fierce or not.

    Given The Ministry of Justice have said the increased “fees” will lead to a ~£200 more million profit pa, it is a Tax

  5. Dunno about the UK, but over here in Canada, wise lawyers, mine, prepare asset transfer documents for everything owned by an old person, me, and have them fully and properly executed.

    They then sit in a file until I croak, at which point the documents get pulled out and used, assets are transferred without probate, rapacious lawyers and governments thwarted, even if only partially.

  6. Fred Z

    In the UK, that’s trickier with a house (which is often a good chunk). Different planning is required.

    One of the tax Andrews could explain it far better, but you have IHT, CGT, and PRR (which gets you exemption from CGT) if it’s your (principle) private relief.

    If the transfer apparently took place years earlier, the person who owned it at that point now potentially has CGT to pay from that date up to the date you die. Because there is no PRR eligible for them as they weren’t living in it during that time (you were).

    And then because you weren’t paying rent (at market rate to the person you (apparently) transferred it to, presumably?), it is deemed for IHT (but solely for IHT) as if the transfer never took place because it was “with reservation” (ie you were still receiving a benefit from the asset). Hence, IHT to pay anyway.

    Double trouble for the poor bugger inheriting! As in worse off than if it hadn’t been “transferred”…

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