The government is increasingly facing calls to extend loss relief from 12 to 18 or 24 months as probate delays continue to worsen.
This comes as recent figures revealed that probate applications remain delayed despite a slight decrease in the wait for paper applications.
Sarah Lockyer, partner of the law firm, Nockolds, told This is Money how they have seen “many more cases of this kind over the past year in which bereaved families are at their wits’ end and facing financial difficulties because of these delays”.
“In many cases shares are being sold for less than the probate value but due to ongoing processing delays with probate applications, executors are losing the opportunity to claim relief from inheritance tax.
The Government has resisted calls to extend loss relief from 12 to 18 or 24 months despite delays worsening.”
In the same article, Lockyer identified “three financial costs, on top of the emotional cost of protracted waits for probate”:
– Extra professional fees, because executors must often complete additional tax returns, for example.
– Property sales falling through, which in a difficult property market means homes are finally sold for considerably less than they would otherwise.
– Paying more inheritance tax than necessary if grant of probate takes too long, as families miss out on claiming tax relief on share price falls by breaking a one-year deadline.
Sean McCann, chartered financial planner at NFU Mutual, said:
“It can take time to collate all the details of the estate and complete the inheritance tax forms to apply for probate, if you add on the delay in processing and any potential challenges from HMRC, you can run out of road to meet the 12-month deadline.”
The recent data from HM Courts & Tribunals Service revealed that, for the 26,637 grants of probate issues in March 2023, the average timeline from submission to grant was 10.8 weeks – showing an increase from February 2023 which was 10.6, according to the data.
However, this is still a reduction from the 11 weeks recorded in January. The data also remains above the 9.2 week average seen over the last 12 months.
Of the 26,637 total number of grants issued, 21,232 were digital. For non-stopped applications, the average wait was 5.1 weeks, which shows an increase to February 2023 as it was 4.2 weeks.
For stopped digital applications, delays sat at an average of 17.7 weeks in March – a small reduction from February (17.8 weeks) and even larger reduction from January, which sat at 18.6 weeks. All of which above the 15.6 week average for the last 12 months.
More on this, delays affecting paper applications which are not stopped displays a decrease as it currently sits at 16.4 weeks – as appose to 17.4 weeks in February. Yet, it is still a over the 7.8 week wait seen in March last year.
For those applications which are not stopped, the average wait is now at 29.3 weeks – a reduction from February (30.6 weeks), yet a considerable increase from 22.5 week wait seen in March 2022.