Due to an archaic provision that was established to safeguard the wealth of the Royal Family, King Charles III is exempt from paying an inheritance tax on the Duchy of Lancaster estate that would have cost him millions of dollars.
Since his mother, Queen Elizabeth II, passed away a week ago, His Majesty was entitled to inherit the estate, which is estimated to be worth more than £652 million. If you leave assets to your loved ones after your death that are valued at more than a specific level, the law in the UK requires that you pay an inheritance tax of 40%.
However, due of a law that was established by the government of the United Kingdom in 1993, the King will not be required to make the payment. This rule states that inheritance tax is not required to be paid on the transfer of assets from one sovereign to another.
The then-Conservative Prime Minister Sir John Major stated that the conditions of a hereditary monarchy were “unique,” and as a result, “specific procedures” were necessary.
He implied that the assets of the monarchy were in danger of being “salami-sliced away” by the application of capital taxes over the course of several generations. He told the Commons: “I believe that is necessary to safeguard the independence of the monarchy, and I would not seek to detract from that independence in any way.
“The danger that the assets of the monarchy being salami-sliced away by capital taxation through generations would be the concern that I would have if the arrangements were to be anything other than what they are now. This would result in a change in the nature of the institution in a way that very few people in this country would welcome.”
It’s Completely Out Of Place
Inheritance tax on assets “which are held by the Queen as sovereign rather than as a private individual” would be “obviously wrong,” according to a Memorandum of Understanding on royal taxation from 2013.
It was stated there must be “sufficient private resources” for the monarchy to fulfil its function in national life and to be financially independent from the government. The Prince of Wales, according to the text, stated that he wants for these terms to apply to him upon his succession.
The Royal Family has been approached by Sky News for comment. According to its financial statements, the Duchy of Lancaster estate brought in £24 million in revenue and had assets worth more than £650 million as of the end of March this year.
King Charles inherits not just the throne after the death of his mother, Queen Elizabeth II, but also her private fortune — without having to pay inheritance tax https://t.co/hreZAvgeSb
— AFP News Agency (@AFP) September 8, 2022
The Queen of Great Britain is exempt from paying any kind of tax. However, in 1993, the Queen began voluntarily paying income and capital gains tax, and King Charles is anticipated to follow suit.
The Duchy of Cornwall estate, which has been handed on to Prince William as the new Prince of Wales, was also subject to taxation, which Charles, the former Prince of Wales, paid freely.
If you have inherited private property from the Queen and aren’t Prince Charles, you must pay an inheritance tax. The tax exemption is intended “to preserve the degradation of the Sovereign’s wealth,” as stated by Fisher Jones Greenwood Solicitors in the past.
They made the claim that, unlike ordinary people, the king does not “grow” their estate via labour and commerce. To quote one expert: “The royal family’s fortune would plummet if they were exposed to inheritance tax on a regular basis.”