As King Charles III assumes the throne after the late Queen Elizabeth’s passing, he’s also set to inherit huge sums of money. But, thanks to a special carveout, he won’t have to pay the UK’s inheritance tax.
“As well as inheriting the throne from his mother, King Charles is also in line to receive much of her private wealth,” British newspaper The Independent reports. “On top of official crown property, Queen Elizabeth amassed tens of millions of pounds in her own cash and assets – much of it from art and racehorses.”
Prince Charles will inherit the British throne at age 73, following the death of Queen Elizabeth.
He and his family will also inherit the Queen's estimated $500 million fortune and receive the annual Sovereign Grant — which was $116.7 million in 2021. pic.twitter.com/dCEJJv0KRB
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Normally, in the UK, “Most people pay 40 per cent inheritance tax on anything they inherit over a £325,000 threshold – meaning the monarchy would be on the hook for millions and the Treasury would be in for a windfall,” the paper explains. “Yet King Charles is not liable for a penny due to a deal negotiated between the crown and John Major’s government in 1993, effectively exempting the monarch in situations like this.”
Many people are, quite understandably, frustrated at the notion that the royal family would get a special exemption from a tax applied to everyone else. We have a so-called “estate tax” here in the US, too, although it only applies to estates worth more than $12.06 million, so it doesn’t affect most Americans, generally just the wealthy. But Americans would nonetheless be outraged if certain wealthy people in government got a special exemption to this tax. (Tea was thrown into a harbor for less!)
Yet the solution isn’t to force the royal family or anyone else to pay more in estate taxes. It’s to abolish the estate tax entirely, in the US, UK, and anywhere else, because it’s fundamentally illegitimate as a concept.
Why? Well, just think about it: it’s a tax on dying. The IRS literally refers to the estate tax as “tax on your right to transfer property at your death.” It’s a death tax, plain and simple. Dying already sucks—how can we possibly justify adding insult to injury and slapping mourning families with a huge tax bill?
The very notion of death as a taxable occasion is bizarre, wrong, and kinda creepy.
More crucially, death taxes are double or even triple taxation. People generally agree that you should only be taxed once on the same money. Yet when it comes to the death tax, you are taxed again on money you already paid taxes on when you earned it as income, investment gains, etc. And then, in cases where there are sales taxes, you’ll be taxed again when you spend it!
So, I don’t care whether it’s the royal family, Bill Gates, Kim Kardashian, or some random CEO. Nobody, anywhere, should ever be forced to pay a tax simply for passing on their property to loved ones when they die.