2022 in review

This year has provided a lot of challenges and changes, both in general and within the probate and estate administration industry. This blog will summarise some of the key industry stories and updates that have been in the news in 2022.

Inheritance Tax reporting for excepted estates

For all deaths on or after 1 January 2022, an amendment was made under The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021. The aim was to reduce the number of Inheritance Tax (IHT) application forms submitted when obtaining a Grant of Probate. However, the reporting requirement for gross and net values remains unchanged. Therefore, assets and liabilities still need to be accurately reported for their date of death values as part of the probate application.

Summary of changes

Low value excepted estates	Increased limit on assets placed into a single Trust from £150,000 to £250,000	Increased chargeable transfers made prior to death from £150,000 to £250,000
Exempt excepted estates	Increased gross estate from £1m to £3m
Foreign domiciliary	There are no changes for excepted estates where the deceased was not domiciled in the UK. The regulation has, however, clarified that an estate will not be an excepted estate if the deceased made chargeable gifts within 7 years of the date of death (unless the gifts were £3,000 or less per year)
Transferable Nil Rate Band (TNRB)	The estate qualifies as a ‘low value excepted estate’ if the gross value of the estate is at or below the NRB/TNRB available	The estate qualifies as an ‘exempt excepted estate’ if the gross value of the estate is not more than £3m, and the net qualifying value of the estate is at or below the NRB/TNRB
The prescribed period	The period in which qualifying excepted estates are discharged from an IHT liability has been increased from 30 days to 60 days – within this period, HMRC can request additional information

Probate fee increase

In January 2022, The Ministry of Justice (MoJ) announced that all users of the probate service would now pay a single, flat rate fee. This came into place on 26 January 2022, and fees increased to £273 on applications submitted by both laypersons and professionals. Previously, the fees were £155 for professional applicants and £215 for non-professional applicants.

However, there is no fee payable for estates with a value of £5,000 or less; the £273 fee is only applicable to those estates which are over £5,000.

Read our blog and share it with your clients: can probate fees be paid from the estate?

Extension of virtual Will witnessing

Due to COVID-19 and the period of isolation, an adjustment to the Wills Act 1837 permitted for Wills to be witnessed via video technology, such as Zoom or Skype. This was originally due to end on 31 January 2022; however, the MoJ deemed it necessary for this to remain in place, as many continued to self-isolate. On 11 January 2022, the legislation was extended until 31 January 2024. However, this is subject to review by the Law Commission, who will decide whether to make more permanent changes.

Read our blog for more information and industry opinions on the extension of virtual Will witnessing.

Grant of Probate delays

Legal professionals and families administering a loved one’s estate continue to face delays with Grant of Probate applications in England and Wales. The Law Society has summarised updates from HMCTS throughout the year. See below a breakdown of these updates, which shows the average time taken from application submission to Grant issue:

	December 2021	January 2022	May 2022	September 2022
Digital applications with stops	15.4 weeks	15.8 weeks	13.5 weeks	15.2 weeks
Digital applications without stops	3.9 weeks	4.2 weeks	4.1 weeks	4.2 weeks
Paper applications with stops	21.6 weeks	21.5 weeks	22.8 weeks	27.3 weeks
Paper applications without stops	8.4 weeks	9.8 weeks	8.9 weeks	11.9 weeks

According to data from HMCTS, the average total time taken from submission to Grant issue for all probate applications was 9.3 weeks in September 2022, representing the biggest delay seen since October 2021. Further delays can come about when there are issues with the application – this can be avoided by being aware of the common questions HMCTS may ask and including as much information as possible so that they do not need to come back with minor queries.

Read our blog about the common causes of stopped applications and how they can be avoided.

Here at Kings Court Trust, we have bi-monthly catchups with the registry to understand their current delays and targets. However, the delays we have been experiencing have been longer than those reported by HMCTS, with some paper applications taking over 16 weeks and digital applications taking up to 8 weeks.

Trust Registration Service and AML compliance

Back in 2017, HMRC established the Trust Registration Service (TRS) – a digital platform that Trustees are required to use to fulfil their registration obligations for Trusts, detailing the settlor, Trustees, and beneficiaries. This reduces the risk of Trusts being used as vehicles for money laundering.

HMRC has now extended the TRS to include non-taxable express UK Trusts following the UK’s implementation of the EU’s 5th Money Laundering Directive (5MLD). The deadline for registration of non-taxable Trusts was 1 September 2022.

Most other Trusts also require registering, with the exception of those that have been appointed out to beneficiaries within two years of the death, meaning that the Trust no longer exists. Although Kings Court Trust is not able to register Trusts, we can advise on the process and recommend services from our business partners.

Nil Rate Band freeze extension

During the Autumn Statement in November 2022, Chancellor of the Exchequer Jeremy Hunt announced an extension of the Nil Rate Band (NRB) freeze until 2027-28. The NRB has been at its current level of £325,000 since 2009.

The freeze was originally in place until 2025-26; the extension will represent a near 20-year freeze on the current rate. However, the extension could raise half a billion pounds for the Treasury by maintaining the threshold at which IHT is paid.

Kings Court Trust throughout 2022

Kings Court Trust’s 2022 business highlights include:

An improved document storage offering. Referring partners can securely store documents (Wills, LPAs, etc.) free of charge. We do not charge for individual retrievals. This provides added value to our partnerships and improves our service for your clients, offering a more seamless experience when we are instructed by them.
One year since the launch of Partner Portal, which allows partners to manage their referrals and document storage online. We currently have 400+ partners using the service. Partner Portal allows us to streamline our document storage service, automatically notifying partners of any changes. Additionally, it provides easy access to a variety of support and resources, such as webinars, literature, FAQs, and more.
We were awarded highly commended for Probate Provider of the Year (South) and Best Use of Marketing and Social Media at the British Wills and Probate Awards in October 2022.
Our 20^th anniversary since being founded in 2002. 20 years on, we are proud to be the UK's leading specialist estate administration provider and work in partnership with hundreds of Will Writers, Financial Advisers, Estate Planners, and Funeral Directors to provide our award-winning probate and estate administration services to their clients.

We look forward to working with you in 2023 to provide our expert, fixed-price, and award-winning probate and estate administration services to your clients.

Merry Christmas and a Happy New Year from the team at Kings Court Trust!

Want to get in touch to discuss working in partnership with us in 2023? Fill in the form below and a member of the team will be in touch:

Nigel Merchant is a Technical Manager at Kings Court Trust, where he has worked for over 17 years. Nigel has conducted over 2,000 family meetings and built up a huge amount of technical knowledge to share with partners and clients. Nigel has a calm and empathetic delivery which helps families at the difficult time of losing a loved one. Previously, Nigel worked at HSBC bank for over 25 years in the branch network, lastly as a Branch Manager and Personal Banking Manager, highlighting that customer service is a key driver for Nigel.