Probate is inheritance tax with no legal basis

It has now been announced that Guernsey probate will continue to be administered by the Ecclesiastical Court. It should be noted that Guernsey probate is not the same as UK probate. In Guernsey, and I quote ‘there is no requirement in law that executors are required to obtain probate’ from an email I received from The Dean in September 2019 which was in response to an enquiry I made.

A further quote from the senior assistant to the registrar states: ‘At present there is no law compelling anybody to get probate.’ My enquiries were prompted by the experience of a friend. Her mother passed away, she was an executor of the will and when she approached the bank, armed with proof of identity and an authorised copy of the will, she was told to obtain probate from the Ecclesiastical Court.

This involved swearing an oath, in the presence of a registrar, which is optional. ID was required but the will was not requested. The fee had to be paid prior to issuing the document. Based on £460,000 cash assets the fee was £1,500. (Guernsey probate does not include property). The procedure was completed in minutes.

Here is an extract of a letter from a local high street bank dated 18 September 2019: ‘I can confirm that whilst a grant of probate is not legally required in Guernsey, it is an internal policy requirement for any accounts with a balance of over £10,000... the measure is in place in order to keep our customers as well as the bank safe and secure…’

Confusing, as neither the Church nor the financial institutions accept legal liability. They go on to say: ‘The bank does have the ability to waive this requirement…’ I defy anyone to make sense of this.

Just as a point of interest, the practice ceased in Jersey in 1949 when the functions were transferred to the Probate Division of the Royal Court of Jersey.

The following sentence was included in the statement made by the president of P&R in June 2018: ‘Consultees were positive about the Ecclesiastical Court’s service in terms of the speed of granting probate and the friendly and helpful customer service. The general consensus was that the fees currently charged by the Ecclesiastical Court were reasonable.

These are the fees taken from a tariff established in 1987.

Gross value of estate fee (which excludes property) £500 – £6.00 then small increments up to £80,000 – £155. For amounts over £80,000 add for each additional £10,000 or part thereof: £35.00, and then it gets interesting:

For estates with a value in excess of £28,000,000 the fee is capped at £100,000. There is no variant of procedure in obtaining probate for assets amounting to either £500, £500,000, or £1,000,000. As the fees are asset-linked this must surely be construed as a tax (fee) on inheritance.

According to promotional information published by Locate Guernsey to attract newcomers to Guernsey: ‘There are no inheritance, capital gains, wealth, gift and estate taxes or VAT.’ Which is not entirely true.

It is proposed that the Church will now transfer the net surplus to the Social Investment Fund. As a matter of interest the registrar’s fees (in the region of £200,000 p.a.) will be included in their running costs. In September 2018, in the spirit of transparency, the Dean kindly furnished me with the following figures: ‘Total income in 2018 (most, but not all, of which was for probate services) was £629,047.00. Running costs of the court (including salaries) £334,770.00. Carried forward to 2019 £213,763.00. Any surplus income is paid to the Deanery Fund LBG, a Guernsey company and charity, and used for charitable purposes.’ I was also given a list of some of the examples of charitable donations made over the past few years, inter alia: Caritas Cafe in Mill Street, Christmas lights in St Peter Port, Sanctuary Centre in Sark, amenities trolley at the hospital.

My further research uncovered the history of Guernsey probate (fascinating in itself and far too lengthy to expand on in this letter) and how local financial institutions, albeit with no legal requirement, have historically made it a necessity. Should a question of legality arise, neither the Church nor the financial institutions will accept legal responsibility.

In the current difficult circumstances of dealing with Covid, lockdowns, etc. this is in no way a criticism of the States, who have done a sterling job of keeping us safe, and their decision to maintain the probate services of the Church is understandable.

However, if it quacks like a duck, walks like a duck – call it a duck. Or, if you prefer, inheritance tax.

SANDRA KING