- King Charles has inherited the Duchy of Lancaster estate, which is valued at over $750 million.
- The estate is exempt from inheritance tax due to a rule passed in 1993.
- The duchy’s financial records for last year show that it generated $27 million in income for the Queen.
Because of a regulation allowing assets to be transmitted from one sovereign to another, King Charles will not have to pay inheritance tax on the Duchy of Lancaster estate he inherited from Queen Elizabeth.
Charles automatically inherited the estate, which is the monarch’s primary source of income. Meanwhile, his eldest son Prince William inherited another large estate – Duchy of Cornwall – valued at more than $1 billion from Charles’ own father.
The new monarch will be exempt from inheritance tax on assets valued more than $750 million as a result of a UK government regulation implemented in 1993 to prevent the royal family’s assets being exhausted if two rulers pass away within months of each other.
The provision was first used in 2002 when the Queen Mother passed down an estate totaling $80 million to the Queen, which included a collection of Faberge eggs.
The clause means that, to help protect its assets, members of the royal family do not have to pay the 40% levy on property valued at more than £325,000 ($377,000) that non-royal UK residents do.
Last year, the Lancaster estate generated £24 million ($27 million) in revenue, as stated in its financial records. The King is now entitled to this income.
The duchy has a net worth of more than £650 million at the end of March 2019, according to its website. In 1702, Parliament passed legislation prohibiting the monarch from selling any of the assets. The Queen began paying income and capital gains taxes on her property voluntarily in 1993, and Prince Charles may choose to do so as well.
According to its website, the Duchy of Lancaster estate was established in the 13th century and includes “commercial, agricultural and residential” properties along with a portfolio of financial investments. The estate’s five rural Surveys span around 18,000 hectares of land throughout England and Wales.
The Foreshore Survey encompasses 36,000 hectares of land from the River Mersey to Barrow-in-Furness in northern England. It also includes the Minerals Survey, which covers limestone and sandstone quarries from south Wales to North Yorkshire.
However, the majority of its profits come from the Urban Survey, which includes significant commercial property interests in Central London such as the Savoy Hotel.
The Savoy Hotel in central London is owned by the Duchy of Lancaster.
The royal family owns the Balmoral and Sandringham residences, while most of the other properties they use, including Buckingham Palace and Windsor Castle, are part of the Crown Estate.
The Duchy of Lancaster was unavailable for comment.