The Enterprise Investment Scheme: What tax reliefs are available?
In his latest article, experienced Corporate & Commercial Solicitor Paul Longland answers your questions on EIS tax relief.
Current application fees
When a loved one passes away, one of the key steps in administering their estate is making an application for Probate. This application currently has a court fee as follows:
| 1. The estate is worth less than £5,000 | No fee payable |
| 2. The estate is worth more than £5,000 and making a self-application | £215 |
| 3. The estate is worth more than £5,000 and making an application through a professional body (for example a solicitor) | £155 |
2017 Proposal
In May 2017, these court fees were due to increase significantly on a sliding scale, based on the net worth of the estate, reaching an eye watering maximum of £20,000. For further information on these initial proposals, please see our article from March 2017.
However, due to the general election that took place in June 2017, the Ministry of Justice fortunately decided there was not enough time for these proposed changes to go through parliament, and therefore they were put on ‘hold’ until the general election was over.
2018 Proposal
Following this general election, the suggested increases were reviewed again and a new proposal was put together; the Non-Contentious Probate (Fees) Order 2018. This order, whilst still increasing the fees, has done so on a lesser gradient than the 2017 proposal. The new recommended fees are as follows:
| 1. Estate is worth less than £50,000 | No fee payable |
| 2. Estate is worth between £50,000 and £300,000 | £250 |
| 3. Estate is worth between £300,000 and £500,000 | £750 |
| 4. Estate is worth between £500,000 and £1,000,000 | £2,500 |
| 5. Estate is worth between £1,000,000 and £1,600,000 | £4,000 |
| 6. Estate is worth between £1,600,000 and £2,000,000 | £5,000 |
| 7. Estate value exceeds £2,000,000 | £6,000 |
Whilst a decrease from the suggestions of 2017, the 2018 order is still a huge step up from the current maximum fee of £215 and has therefore received a significant amount of resistance from concerned bodies who have consulted on the order. It has been described as a way of ‘increasing inheritance tax via the backdoor’ and places a significant financial strain on those already trying to grieve the loss of a loved one.
Latest development
Despite receiving such a backlash, this order had been scheduled for parliamentary review since February 2019 for approval. However, the latest upheaval by Boris Johnson of suspending parliament has had the consequential effect of lapsing the 2018 order, meaning the current fees (£215 or £155) shall continue to remain in force for the foreseeable future. Once parliament re-assembles next month, it shall fall to it to re-introduce the order, however, with other pressing matters more likely to be at the forefront of their minds, it shall remain to be seen when, if at all, this order will be re-introduced.
