‘Civil service delays cost me £1m of my inheritance’

Families face having huge sums wiped off inheritances, as house sales fall through because of civil service delays.

After someone dies, a legal document called a grant of probate is required so families can settle the deceased’s estate and pay beneficiaries their inheritance.

Without it, families can be left in financial limbo, unable to access large sums held in the deceased’s bank accounts or even sell their loved one’s home.

But it is now taking so long for civil servants at probate registries to issue grants that house sales are collapsing, The Telegraph can disclose – just as the property market is starting to cool.

Will Richards, of law firm Hine Downing Solicitors, said he had seen a half a dozen property sales fall through in the past year because of queues at the courts.

“In one case it took three months for the registry to issue a grant,” he said. “The buyer wasn’t willing to wait, so they walked.”

Cases have been delayed since the pandemic, but have worsened. The Ministry of Justice tells executors to expect a four month wait before they can get a grant of probate – even longer than the 12-week delays seen during the pandemic.

Delays have been an issue since registries moved their system online in 2019 and have been made worse since by a higher death rate in the wake of the Covid-19 and a loss of highly trained staff.

Crucially it comes as property prices are already falling, putting families at risk of inheriting far less than they were expecting at the time of the death of a relative.

Today one in 10 sellers are being forced to shave up to 10pc off the asking price in order to secure a sale as demand slumps. It comes just weeks after The Telegraph revealed families have been slapped with extra inheritance tax charges for late payment, due to the delays.

Others are inheriting investment portfolios that have plunged in value due to stock market volatility.

Mr Richards said one of his clients lost £1m because probate delays meant the family sold their £3m portfolio after the Ukraine war started, by which point their investments had plummeted.

The law firm JMW said investment losses were becoming “a serious issue” for bereaved families, especially given recent stock market falls.

The silver lining is families can normally claim back the inheritance tax from HM Revenue and Customs when they sell the deceased’s investments for a loss.

But JMW said delays were not leaving families with enough time to claim compensation inside the critical window.

Families have just 12 months to claim loss relief on share price falls from HMRC. The Association of Tax Technicians, an accountancy trade body, has urged the Government to extend the 12-month window to between 18 months and two years in light of the delays.

Joe Cobb, of JMW, said: “For some estates, this is becoming challenging, as the delays at the probate registry can mean that the grant is not issued within a year of death, which means the shares cannot be sold in the requisite period, and the relief cannot be claimed."

Former Conservative minister Ros Altmann said the court delays were "so frustrating for bereaved families" and were costing "thousands of pounds as their loved one’s property sale falls through in a weak market".

"It is not easy to see a resolution as the backlogs have been growing and people cannot demand a ‘fast-track’ route if the property sale is about to fall through.

“I do hope that the Government will look into this and find ways to speed up the process as soon as possible," she added.

Natalie Payne, of law firm Morr & Co, said families were being penalised as a result of faults within the system.

“This is happening right when we’re expected to see a massive drop in property prices,” she said. “It’s families who are having to pay the price for their mistakes.”

A HM Courts and Tribunals Service spokesman said: “The death rate has been considerably higher since 2020 causing a surge in probate applications but we are dealing with them in seven weeks on average – almost one week quicker than a year ago.”