LONDON: 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.
British monarchs are not required to reveal their private finances but according to the Sunday Times Rich List 2022, the queen was worth some £370 million ($426 million), up £5 million on the previous year.
The bulk of the late sovereign’s personal wealth will pass to Charles intact, without the British government getting a slice.
The real royal wealth — the Crown Estate lands and the Royal Collection of art and jewellery, plus official residences and the Royal Archives — is held by the monarchy as an institution.
As such, they will only pass to Charles in trust.
Similarly, The Crown Jewels, estimated to be worth at least £3 billion, only belonged symbolically to the queen and are automatically transferred to her successor.
The queen’s private wealth will be added to Charles’ own, which has been estimated at some $100 million by the site celebritynetworth.com.
In comparison, Elizabeth’s late husband, Prince Philip, left a more modest estate worth £10 million, including an art collection of some 3,000 works, most of which were given to family and friends, the Sunday Times reported.
A court in 2021 ordered his will to be sealed for 90 years. As king, Charles inherits the Duchy of Lancaster, a private estate of commercial, agricultural and residential assets owned by royalty since the Middle Ages.
The monarch is entitled to use its income and largely uses it to meet official expenditure. In the financial year 2021-22, it delivered a net surplus of £24.0 million.
On the other hand, Charles will lose the Duchy of Cornwall, another private estate, in southwest England. It brought in a revenue surplus of some £23 million in 2021-22.
The duchy, created in 1337 by Edward III for his son and heir, prince Edward, will go to Charles’ eldest son, Prince William, who is now heir to the throne.
Charles will also receive the annual Sovereign Grant from the UK Treasury, which is set at 15 percent of the profits from the Crown Estate, and which the monarch surrenders to the government under a deal dating back to 1760.
The Sovereign Grant covers costs of official engagements for the monarch and other senior members of the royal family, paying the salaries of their staff and the upkeep of royal palaces.
In 2021-22, it was set at £86.3 million — equivalent to £1.29 per person in the UK — and included funding for the renovation of Buckingham Palace.
The Crown Estate’s portfolio includes commercial and retail properties, including prime locations in central London, as well as rural and coastal land across the country, and the waters around England and Wales.
That makes it one of Europe’s biggest property empires, with a huge commercial interest in areas such as developing offshore wind power generation.
In the financial year to March 2022, it posted a net revenue profit of £312.7 million, up from £269.3 million in 2020-21.
Inheritance tax in Britain is charged at 40 percent on estates above a £325,000 threshold.
But the new king will not pay inheritance tax on the personal wealth he will inherit from his mother due to rules drawn up in 1993.
Those assets passed from one sovereign, or a consort of a sovereign, to the next monarch, are exempt.
The rules were drawn up to avoid wiping out the royals’ private wealth in the event that a series of monarchs died in quick succession and their estate was reduced by 40 percent every time.
The rules, set out in a 2013 government memorandum of understanding, also ensure the monarch has his or her own private money and thus financial independence from the state.