News
King Charles III won’t pay 40% inheritance tax on £641 million estate
A government spokesperson said "the Monarchy as an institution needs sufficient private resources to enable it to continue to perform its traditional role in national life".
Georgina Pellant -
13th September 2022 
With the nation in mourning following the death of Queen Elizabeth II, King Charles III has inherited her position as head of state.
His Majesty has also inherited most of the Queen’s multi-million-pound estate, which is reported to be worth £641 million by AS News.
This includes a mixture of public and private assets, with the late Monarch having reportedly ammassed tens of millions in private wealth through art and racehorses and other assets throughout her lifetime.
But while ordinary British citizens are required by law to pay a 40% tax on inheritance over £325,000, this won’t be the case for the new monarch.
The reason is thanks to a 1993 change in royal inheritance law that prevents a depletion of royal funds in the case of royal deaths in quick succession.
Despite being introduced by the John Major government nearly 20 years ago, the change was not applied until 2002 following the death of the Queen Mother. Now it is being applied again, effectively depriving the Treasury of a windfall.
Speaking to The Express, a government spokesperson said that requiring the Moarch to make an inheritance tax payment would ‘inappropriate’.
In a comment given to the paper, the Government explained: “Some assets are held by the Queen as Sovereign rather than as a private individual.
“They are not sold to provide income or capital for the personal use of the Queen and pass from one Sovereign to the next.
“The official residences, the Royal Archives, the Royal Collection of paintings and other works of art and other assets held by the Queen in right of the Crown fall into this category.
“It would clearly be inappropriate for inheritance tax to be paid in respect of such assets.”
However, a spokesperson also said that the new King would also be exempt from paying tax on private assets because “the Monarchy as an institution needs sufficient private resources to enable it to continue to perform its traditional role in national life”.
They added another reason for the exemption is to ensure the monarch has “a degree of financial independence from the Government of the day.”
Any relatives beyond King Charles II, however, will still be required to pay tax on inherited assets.
The Government outlines: “In relation to assets which can properly be regarded as private, the arrangements provide that inheritance tax will not be paid on gifts of bequests from one sovereign to the next, but will be payable on gifts and bequests to anyone else.
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“Tax will also not be payable on assets passing to the Sovereign on the death of a consort of a former Sovereign.
“The reasons for not taxing assets passing to the next Sovereign are that private assets such as Sandringham have official as well as private use, and that the Monarchy as an institution needs sufficient private resources to enable it to continue to perform its traditional role in national life, and to have a degree of financial independence from the Government of the day.”
Feature image – BBC
