The veil of secrecy surrounding royal finances was nudged aside on Thursday with the release of a new piece of information: for the first time, the public learned how much King Charles's annual tax bill amounts to. The declaration, a two-sentence statement, revealed that his tax payable for 2024-25 was £12.9 million, with a slightly smaller sum the previous year. Since his accession, his total tax paid has reached £30 million.
Unlike other citizens, the monarch is not legally liable for tax, but King Charles and his mother before him began paying it voluntarily in 1993. However, the declaration was short on details: it did not disclose his total income for those years, the total value of his private fortune, or how much his tax bill was reduced by expenses such as those incurred performing royal duties.
Comparison with Other Taxpayers
The small nugget of information has brought to light a startling fact: the king's tax bill is low, even when compared with individuals who have smaller fortunes. According to the Guardian's 2023 Cost of the Crown series, the king's private wealth, known as the privy purse, is estimated to be at least £1.8 billion. This includes the Duchy of Lancaster estate, a £690 million land and property portfolio that provides him with £25 million annual income, as well as other assets such as cars, jewels, art, and the private residences of Balmoral and Sandringham. The extent of the king's financial investments and their revenues remains largely unknown.
Comparisons with other taxpayers highlight the discrepancy. This year's Sunday Times tax list shows that hedge fund boss Suneil Setiya, also estimated to be worth £1.8 billion, paid £114 million in annual tax—nearly ten times the sum the king paid in 2023-24. Musician Ed Sheeran, with a fortune of £410 million, paid £20 million to HMRC. Author JK Rowling, worth an estimated £975 million, was billed £47 million on her earnings and gains. Even Manchester City footballer Erling Haaland, who is Norwegian, paid £17 million in his most recent tax bill, more than the king.
Tax Advantages of the Privy Purse
Without more information about the size and shape of the privy purse, it is impossible to say exactly why the king's bill is so low. What is known is that the Duchy of Lancaster is not liable for the kinds of taxes that might be paid by a company or a trust. Capital gains from buying and selling property, as well as rents received from tenants, can accumulate and be reinvested tax-free, allowing the king's wealth to grow more quickly than that of his subjects.
The privy purse could be described as operating like a mini-tax haven. The assets held by the duchy are untaxed, while the king's other holdings are undeclared. The palace says the king voluntarily pays capital gains on his privately held wealth and that the accounts are externally audited each year. They maintain that this part of his personal holdings remains private, as for any other citizen. However, no other citizen has such discretion over the tax they choose to pay. The palace was approached for comment.
