SRA Transparency Rules: Probate

Costs in the administration of estates after death

We offer the choice of either a fixed fee agreement for administering an estate after death or fees based on time spent dealing with the matter in accordance with our hourly rates published below. Every estate is different; sometimes, unforeseen issues can arise during an administration, affecting the amount of time necessary to complete the work and the timescale for completion.

The fees quoted below are for the work we will undertake on your behalf. It does not include any taxes that may be payable by the estate, such as inheritance tax (IHT), capital gains tax (CGT) (on a later disposal of an asset) or income tax. The information provided below does not include any estate with a foreign element or a dispute of any nature. These two aspects have been specifically excluded by the SRA Transparency Rules under which this information is provided.

Fixed fee option

Should you wish to do so, we are happy to agree to a fixed fee for administering an estate in the UK. We will review the details of the estate, assets and liabilities. We will then provide you with a fixed fee quote, taking into account the various issues in the estate, the nature and types of assets and liabilities, and any perceived risks. This would usually include a modest uplift to allow for the possibility that we end up carrying out more work than was anticipated at the outset. Most clients prefer the fixed fee option as it gives them certainty in terms of the overall cost.

Time spent option – range of costs

It is not possible to state precisely how much an administration will cost as this depends on a number of factors, including:

• the size of the estate;
• the different types of assets within the estate;
• any assets held in foreign jurisdictions; or if the deceased was not UK-domiciled or deemed UK-domiciled;
• having to investigate lifetime gifts by the deceased, which would affect the taxation of the estate;
• the number of beneficiaries and how these must be dealt with;
• IHT issues (is IHT payable on the estate, or is it an exempt estate?);
• business property relief;
• valuation of asset issues (are these being challenged by HM Revenue & Customs (HMRC)?);
• exotic/intangible/digital assets requiring specific attention
• Intestacy Rules affecting the estate (if there is a partial or complete intestacy);
• any issues relating to the will (for example, interpretation, validity, the appointment of executors, those entitled to probate or the beneficiaries, missing beneficiaries, and so on).

There are so many potential variables and complications that it is impossible to provide an exhaustive list.

Charges for administering an estate will generally fall within the range of £5,000 to £15,000 plus VAT (£6,000 to £18,000 inclusive of VAT). Sometimes the charges will be less than £5,000, and sometimes they will be more than £15,000, depending on the variables involved, as indicated above—the average range of cost: £5,000 to £15,000 plus VAT.

Our private client department consists of the following fee earners, and their standard charge-out rates (exclusive of VAT) per hour are:

• James McMullan, Partner & Head of Department, qualified as a solicitor 1990 – £475 per hour plus VAT.
• Herman Cheung, Senior Associate Solicitor, qualified 2011 – £375 per hour plus VAT.
• Charlotte Barbaroussis, Trainee Solicitor £200 per hour plus VAT
• Solicitor Apprentice/Trainee Solicitor/Paralegal – £150 to £200.

James McMullan supervises all work carried out by junior fee earners.

The following summarises the work we typically do in administrating an estate. This is essentially the standard process we undertake, not including any of the variables or complexities mentioned, which, if applicable, would add to the work we must do to complete the administration successfully. This summary is more or less in chronological order regarding the steps or stages that need to be taken and usually, although not necessarily, in that order.

The following work is required in a typical estate administration:

• taking instructions and advising the client throughout the process of the administration;
• gathering all necessary documents to provide evidence of the value of the assets and liabilities of the estate;
• advertising the death in the London Gazette and/or local newspaper for the area in which the deceased resides;
• Corresponding and liaising with various creditors and financial institutions;
• completing an IHT account, calculating any IHT liability and arranging for payment of the IHT debt, if any;
• Check the estate’s income tax position up to the date of death and during the administration period. Liaise with the deceased’s accountant and provide the necessary information for them to complete the income tax returns. Making any application for an appropriate income tax rebate and/or arranging for payment of income tax liability. Checking any CGT issues and liaising with an accountant to resolve these;
• preparing the legal statement, making the application for the grant of probate, and paying the Court fee;
• upon receipt of the grant of probate/administration, gathering in the assets, paying outstanding debts, and arranging for the transfer of assets to beneficiaries in accordance with the deceased’s will;
• preparing a final estate account as a record of the administration for the executors’ approval;
• accounting to the beneficiaries for their entitlement under the will (or intestacy if there is no will);
• advice concerning all relevant aspects of IHT in connection with the estate, including any exemptions and reliefs from IHT, availability of the deceased’s nil rate band, and any transferable nil rate band; the effect of any lifetime gifts for IHT; and
• advice concerning any CGT liability in the event of any gains realised or losses suffered on the sale of the assets over and above probate value.

Potential additional costs

Suppose there is no will, or the estate consists of any share holdings (stocks or bonds) or other unusual assets. In that case, there are likely to be additional costs that could range significantly depending on the estate and how it is to be dealt with. We can give you a more accurate quote once we have more information. We can also advise on opportunities for estate planning during the administration process by the use of deeds of variation/appointment out of trust, etc.

Dealing with the sale or transfer of any property in the estate is not included.

Disbursements in probate work

• Court fees for probate are currently £300 plus £1.50 per sealed copy.
• Statutory advertisement of death (London Gazette, local newspaper) est. £130 plus VAT for each.
• Bankruptcy search fees are £2 per name (no VAT). Foreign bankruptcy search will usually cost circa £50 or more.
• Land Registry fees for title to property are £3 and for any additional Land Registry work (cost based on the property value in accordance with Land Registry tariff) (plus VAT).
• If necessary, fees for obtaining valuations for assets (experts’ fees will normally be subject to VAT).
• Accountants’ fees for income tax returns are charged to VAT.

Time scales

It is impossible to say how long an administration of an estate will take as each one is different. On average, an administration will take 12 months. Some will take less than that if they are very straightforward and there are minimum delays in the system, while other estates can be complex and take much more time to process.

For full details of our charges, please see the “Charges” section of our General Terms of Business, a hard copy of which is available on request.

We are happy to discuss the costs in relation to any item of work undertaken by us.