How does inheritance work in the royal family?

Inheritance can be a touchy subject, especially as it involves all the emotions associated with a death in the family, dealing with inheritance tax and dividing the bereaved among several family members when the will of the bereaved is unclear.

But as complicated as they are to ordinary people, inheritance in the British royal family can be mysterious, as monarchs’ wills are sealed decades after their deaths.

When Queen Elizabeth II died last September, her eldest son, now King Charles III, inherited more than just the crown.

The exact value of how much Charles inherited is unclear, but at least one of the assets he received is the Queen’s private estate, the Duchy of Lancaster, which is valued at more than £650million.

However, the king has reportedly stirred up “some resentment” among his younger siblings, the Duke of York, the Princess Royal and the Duke of Edinburgh, over their late mother’s inheritance.

Prince Andrew in particular is said to be “distraught” that Charles has not distributed the late Queen’s inheritance. As a non-working king, unlike Princess Anne and Prince Edward, he does not receive alms from the Sovereign Grant to cover expenses.

Here’s everything you need to know about how inheritance works in the royal family.

Who inherits the Queen’s fortune?

King Charles is the sole beneficiary of the Queen’s fortune, including her £650million estate.

In addition, she amassed tens of millions of pounds in her own cash and fortune, mostly through art and racehorses. While the true value of her fortune is unknown, the Sunday Times rich list In 2011, she estimated her personal fortune at £370 million.

Why is there only one beneficiary?

In 1993 an agreement was negotiated between the Crown and the government of John Major effectively exempting the monarch from paying inheritance tax.

If that were not the case and the regular inheritance tax regime applied, Charles would have to pay 40 per cent inheritance tax on anything he inherits over a threshold of £325,000 – which would have meant paying millions to the Treasury.

However, the agreement with Major’s government was part of a “Memorandum of Understanding on Royal Taxation” which states that some royal assets are held by the monarch as “sovereign rather than a private individual”.

It is therefore “clearly … inappropriate to pay inheritance tax on such assets”.

The memorandum also exempts the monarch’s private property from inheritance tax when passed on to the next sovereign.

“With respect to assets that may properly be regarded as private, the agreements provide that inheritance tax is not payable on gifts or bequests from one sovereign to the next, but is payable on gifts and bequests to others,” it said in this.

Therefore, anything Charles inherited from his mother is not subject to inheritance tax.

Will Charles split the inheritance between his siblings?

It seems the king has no intention of sharing his vast inheritance with his siblings.

However, Anne and Edward are working royals and can rely on handouts from the Sovereign Grant.

But Andrew, who stepped down as working king in 2019 because of his ties to convicted pedophile Jeffrey Epstein, is relying on the king’s generosity to fund his lifestyle.

The Post on Sunday quoted a friend of the Duke as saying: “What’s he up to? Going to his older brother with a hat in hand to keep a roof over his head? It’s a disaster.”

It comes after Andrew reportedly told friends he may have to move out of the Royal Lodge in Windsor – where he has lived for almost 20 years – if the king cuts his annual cut of £249,000 from April.

The Independent has reached out to Buckingham Palace for comment.

What are the main sources of income for the royal family?

The royal family has three main sources of income namely the Crown Estate, the Duchy of Lancaster and the Duchy of Cornwall.

A real estate portfolio worth around £15 billion, the Crown Estate includes Buckingham Palace, the Royal Lodge, Windsor Castle and a number of other royal estates, as well as much of central London. In fact, the monarch is one of the largest property owners in the West End.

It also includes the seabed and half of the foreshore around some parts of England, Wales and Northern Ireland.

However, the royal family is not a true owner of the crown estate and acts more like a portfolio manager. Profits from the estate go to the UK government and part of the proceeds are returned to the royals in the form of the Sovereign Grant.

As previously mentioned, the Duchy of Lancaster is valued at £650million. The estate will pay the king an income of around £24million, as did the late queen.

But before ascending the throne, Charles enjoyed the Duchy of Cornwall as a former Prince of Wales. He has now passed this property on to his eldest son, Prince William.

The Duchy covers more than 52,000 hectares of land in 20 counties in England and Wales. His net worth was estimated at more than £1billion as of March 2022 and paid Charles an income of £21million.