Not only has King Charles inherited his mother’s crown and the throne, but the Duchy of Lancaster estate has also passed to him upon the Queen’s death.
In 2021, the estate made just shy of £22 million in revenue for the Queen. The Crown Estate, which is separate, has £15.2 billion in assets, which fund the treasury and royal expenses, of which 25 per cent of the profits are given to the Royal Family, as the Sovereign Grant. The Sovereign Grant for 2022-23 is £86.3 million – equivalent to £1.29 per person in the UK – the same as it was in 2021-22.
However, King Charles, along with the rest of the Royal Family, will not be paying any inheritance tax on this bequest. Here’s why.
Are the Royal Family exempt from paying inheritance tax?
According to the Sovereign Grant Act 2011, “the Monarch is not legally liable to pay income tax, capital-gains tax, or inheritance tax because the relevant enactments do not apply to the Crown.”
However, the Queen started paying income and capital-gains tax on the estate in 1993, of her own accord.
During his reign, King Charles may decide to do the same, particularly as he has previously said he would aim for a less-expensive monarchy, perhaps more similar to the Scandinavian monarchies.
Where does the Royal Family get their money from?
The finances of the Royal Family come from a number of sources, including the Sovereign Grant from the British Government.
This grant is intended to meet the costs of the King or Queen’s official expenditures, such as the upkeep of the various royal residences, staffing, travel, and state visits, public engagements, and official entertainment. However, the Metropolitan Police is usually expected to fit the bill for security.
Other sources of income include revenues from the Duchies of Lancaster and Cornwall (largely from property), income from assets of other trusts, income from private investments, and a parliamentary annuity.
The Keeper of the Privy Purse is head of the privy purse and treasurer's office and has overall responsibility for the management of the sovereign's financial affairs.
