King Charles made history this week by publicly revealing a £12.9 million tax bill, but the disclosure raises as many questions as it answers, according to a report by BBC News.
The announcement came alongside the Royal Household's annual financial report. Buckingham Palace described the move as increasing transparency, saying it aimed to "encourage wider understanding of our accountability." Prince William's tax bill was also published.
One of the more unusual aspects of the King's tax situation is that he is not legally required to pay income tax, capital gains tax, or inheritance tax. He pays some of these voluntarily, under an agreement with the government called the Memorandum of Understanding, which originated in 1993 following public pressure over the cost of the Royal Family. The MoU was most recently updated in 2023 following the death of Queen Elizabeth II.
Dan Neidle, founder of Tax Policy Associates, told the BBC: "If it's voluntary, it's not tax." HMRC defines tax as "money that individual people and businesses are legally required to pay to the government." The King does pay VAT, employer taxes, and local rates in line with legal requirements, the report noted.
The report also offers limited clarity on how the £12.9 million figure was reached. The King has agreed to pay tax on personal income, income from the Privy Purse not spent on official duties, and capital gains tax on private property sales. However, no breakdown of those categories is provided.
The Privy Purse is the monarch's source of private income, mostly drawn from the Duchy of Lancaster, a royal estate that owns properties including the Savoy Hotel in London. The report states the Privy Purse received £25.2 million from the Duchy of Lancaster for the year ending March 31. The King also has personal earnings that may include investment income and trading profits, but the report puts no figure on those.
Historian Anna Whitelock said the disclosure puts the King "front and centre as a very rich man." She added: "I do think this is very much a sign of the times, and it's an attempt by the monarchy to try and get on the front foot and before they were absolutely pushed to try and show they are responsive and not reactive."
Shaun Moore, a tax and financial planning expert at wealth manager Quilter, said there is ultimately not much detail provided for the public to fully evaluate the bill.
