The total value of legacies to charities could be set to plummet by around £18m a year when a controversial hike in probate fees comes into force in May, legal experts are warning.

The concerns have been raised after the Ministry of Justice announced last month that the £215 flat rate probate fee on estates worth more than £5,000 will be scrapped and replaced with a sliding scale of fees that can be as high as £20,000 depending on the value of the estate

The Institute of Legacy Management (ILM), which represents legacy professionals in law firms and charities, says the dramatic drop has been estimated based on applying the new bandings to latest available figures on wills where charities benefit.

Chris Millward, ILM chief executive, explains that under the flat rate system £5.8m was generated in fees from 2015 wills involving charitable gifts. But under the new bandings this figure would have been £24m, a hike of £18.2m.

The ILM is calling on the government for charities to be exempt from the price increase, with a fixed fee of £150 applied where a charity is the applicant and where all of an estate is devolved on to charities.

He said: “The fee increases is something that erodes the ability of donors to leave their final wishes in the way they want. People who have already written their wills and died whose estates are being administered now look like they will be subject to additional charges that will ultimately diminish the impact and the good that they wanted in the first place.”

The new pricing of fees comes into affect on May 1 and starts at £300 where the value of the estate is between £50,000 and £300,000, escalating to £20,000 on estates worth more than £2m.

For estates worth between £1m and £1.6m the fee will rise to £8,000, while for those valued at between £1.6m and £2m a £12,000 fee will apply.

Helen Elliot, partner of charity auditing and accountancy firm Sayer Vincent says those receiving residuary legacies in excess of £2m will be hit hardest.

She said: “Many wills leave the residuary of the estate to charities so the massive hike in fees –in effect a tax on death – will reduce the amount charities receive by up to £20,000 a time on a large estate.”   

Rob Cope, director of Remember A Charity added: “For a sector which relies so heavily on legacy income, anything that has the potential to change people's will writing behaviour and consideration of how best to take care of everything that is important to them is of concern.

“Our priority is to ensure that government has fully considered the potential impact on charities and that we can continue to build on the excellent progress we have made in providing a positive framework to support and encourage legacy donations.”

The decision to bring in the fee hikes comes despite only 13 out of 831 respondents to a government consultation on the move agreeing with it.

It has also been criticised by Conservative Party politicians.

Speaking in parliament last week North East Somerset MP Jacob Rees-Mogg described the rise in fees as a “stealth tax”.

He added: “Probate charges should relate to the cost of the probate work, which is broadly irrelevant to the size of the estate. There might be some more work for bigger estates, but the difference will not necessarily be as large as has been proposed.”

In its response to the consultation, the Ministry of Justice said that the fee increase was needed to fund the wider court and tribunal system.

It said: “Whilst the Government understands respondents’ concerns over the level of the proposed fees, these increases are necessary.”

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