The Crown Estate — estimated at over $34B in assets — now belongs to King Charles III. But he won't have to pay the UK's 40% inheritance tax. Here's why.

A $200 million pittance?

Avoiding a 40% tax on $500 million isn’t trivial. But since wealth is often a relative term, the inheritance levy on Charles wouldn’t represent much of a grab in the royal bag.

Queen Elizabeth II was the U.K.’s longest serving monarch, reigning over 14 Commonwealth realms as well as Britain, for seven decades. In that time, the Crown Estate’s fortune of assets and real estate valued together swelled to 32.1 billion pounds — a respectable sum, to be sure, but nowhere near the fortunes of the world’s wealthiest people.

The Crown’s assets are overshadowed, for example, by the fortunes held by Elon Musk, Jeff Bezos and Bill Gates.

Queen Elizabeth’s personal slice of royal wealth is estimated at about $500 million, according to estimates from Forbes. She inherited about $81 million after her mother died in 2002 — passing down assets ranging from prized horses and jewelry to valued paintings and Fabergé eggs.

Over the years, those assets plus a healthy real estate collection — including Sandringham House in England and Balmoral Castle in Scotland — raised her total net worth to roughly half a billion dollars.

Elizabeth received income through the Sovereign Grant, a taxpayer-funded pool that amounted to nearly $100 million in 2021 and 2022 and is designed to cover official travel and the operating costs of various properties, including Buckingham Palace, the queen’s official residence.

That grant stems from a centuries-old agreement in which King George III surrendered his income from Parliament in order to receive a fixed annual payment for himself and future generations of the royal family. Charles is now set to receive income from the annual grant.

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Death and taxes

Though Charles may cheat the “death tax” — taxes appear to be certain. Even for royalty.

The official Royal website reported that the queen volunteered to pay income and capital gains taxes in 1993 — despite not being legally obligated to do so — and has paid local taxes voluntarily.

And according to a “Memorandum of Understanding on Royal Taxation” written in 2013, Charles indicated he would pay taxes voluntarily upon inheriting the throne.