Secret Royal Wills and the thorny issue of inheritance tax

Following Queen Elizabeth’s death and funeral, attention has now turned to what will happen to her estate and who will inherit it.

What does the Queen own?

The Queen’s assets can be split into two – those she owned in her own right and those she held in her capacity as Sovereign.

The Queen’s private wealth was last estimated at £370m and includes her private art, residences such as Sandringham and Balmoral, the Royal Philatelic Collection (including stamps from across the Commonwealth), racehorses plus her own investment portfolio.

The Sovereign wealth is estimated at £15.2bn  and includes royal palaces, jewels, the Royal Archives, the Royal collection of paintings and the estate of the Duchy of Lancaster, which is the main source of income for the monarch. The Duchy was originally gifted by Henry III to his son, Edmund, in 1265 and now has assets of over £650 million. The reigning monarch is entitled to the income produced but not the capital – the income believed to be around £24m per annum.


Despite this vast wealth, it is unlikely that the Queen will have to pay inheritance tax on her estate. Inheritance tax is usually charged at 40% of the value of an estate over the usual allowances. “Usual allowances” are the individual allowance of £325,000 and up to £175,000 where there is a residence left to children/direct descendants;  plus any unused allowances which can be transferred from a pre-deceased spouse.

The Queen’s Sovereign wealth is actually “owned” by the UK as a nation and is therefore exempt on the basis it isn’t owned by the monarch and can’t be sold or transferred.

As regards her private wealth, a “Sovereign to Sovereign” deal agreed in 1993 with John Major’s government, provided that any assets left by the current UK monarch to their immediate successor would be free from inheritance tax. The agreement is recorded in “Memorandum of Understanding on Royal Taxation”, which makes for some quite interesting reading –  The rationale behind the deal is to prevent the erosion of the monarch’s private wealth. It preserves the Sovereign’s financial independence from the government of the day and compensates them for not being able to make an independent living. In addition, it records that some of the monarch’s private assets are used for official functions, e.g. Sandringham and Balmoral. The exemption however applies to all the Queen’s wealth – not just those used for official functions and so would apply to her own money, art, jewellery, racehorses etc.

Preserving wealth from generation to generation is not unusual in UK inheritance tax law and is very much akin to the exemptions for farms and many businesses – ensuring that for continuity and the economic good of the nation, they too pass down the generations without having to be sold or broken up, in order to pay inheritance tax.

Inheritance tax would usually be payable if the Queen left assets to anyone other than Charles. However, the Sovereign to Sovereign deal was applied to the Queen Mother’s estate despite her never having actually been a Sovereign, so it remains to be seen what happens here. Prince Philip’s estate would not have qualified for the exemption and so efficient tax planning on his part could have been to leave the bulk of his estate to the Queen on the basis that the Queen then left it exempt to Charles.

Will we know who the Queen left her estate to?

Most Wills become publicly available once Probate has been applied for.  Probate is a document issued by the Court, confirming the right of the appointed executor to be dealing with the estate.  There is however a convention that to protect the privacy of the Sovereign, the Wills of senior royals are kept private and sealed by the Court and are not available to the public. The President of the Family Division (currently Sir Andrew McFarlane) is responsible for safeguarding all royal Wills and currently keeps over 30 in his safe in London. This includes the Queen Mother’s Will, although unusually, Buckingham Palace did disclose some details of her Will as you can see here When making the Order that Prince Philip’s Will would remain private and sealed for at least 90 years, Sir Andrew explained his reasoning here

The Queen’s Will is however in a separate category, and has a dispensation from needing Probate.  This means it could be decades, if ever, before her intentions were known.

If you would like to review your own inheritance tax position, review or make a Will, or make enquiries about Power of Attorney, please contact us here at Guest Walker on 01904 624903, or email  We have an experienced team, used to helping families at various life stages and would be happy to put your mind at rest.

Hudda Morgan
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