Cost of Changing Monarch

10 May 2023

I prepared this infographic to show how the change of monarch from Queen Elizabeth II to King Charles III has cost the tax payer at least £1 billion pounds, with most of that cost being their special exemption from inheritance tax.

I'm talking about the inheritance tax on their private wealth — not the state assets like the crown jewels, state cars, palaces or even the crown estates. Just what is referred to as their "private wealth".

On social media this sparked some debate — three key points worth addressing:

"The Duchies of Lancaster and Cornwall are public property, not owned by the Monarch and Prince of Wales"

This might be true, although their respective websites make clear that they are privately owned by each. Their only function is to generate "private income" for their respective owner, so the "publicly owned" status seems to only be relevant when we're talking about applying inheritance tax to these assets.

"It's naive to think that if they didn't have this exemption, that they wouldn't find another 'tax planning' strategy to keep them exempt"

Again, this is also possibly true. The Duke of Westminster died in 2016 and his £9bn estate was exempt from inheritance tax due to use of an "inter-generational trust". In my view, the monarch's special exemption from taxation is an injustice, and using trusts to evade inheritance tax is another injustice which does not justify the first. I think we should tackle both!

"The Queen and Prince of Wales paid tax voluntarily since 1992"

Their special exemption came to the attention of the media in 1992, and at the time the monarchy were pretty unpopular, so in the face of public pressure they "voluntarily" agreed to pay income tax. This doesn't extend to inheritance tax. I'd rather live in a world where the tax rules were applied consistently rather than carving out a special exemption for one of the richest families in the UK which they then "voluntarily" agree to waive, as if that somehow makes them noble.

These special exemptions (e.g. from tax or equal opportunities laws) are granted to them because they lobby the government of the day for these exemptions. We are not privy to these conversations, but theoretically the monarch could withhold royal consent for any law that isn't varied as they like.