Prince Harry is poised to sidestep inheritance tax on a substantial £7 million legacy, a gift received on his milestone 40th birthday last month.
Tax specialists suggest that due to strategic estate planning, Harry will not be liable for inheritance taxes associated with this sum, which is part of the late Queen Mother’s considerable £19 million trust fund.
Experts at Stocklytics explain that the British Royal Family has successfully avoided the usual tax obligations through careful structuring of the Queen Mother’s estate and her remarkable longevity.
They noted, “With Prince Harry set to receive the final instalment of the Queen Mother’s trust fund, valued at £19 million, many Brits may be asking how much inheritance tax he’ll pay – especially as the latest judicial reviews have cost the taxpayer £500,000 each.”
According to current UK regulations, inheritance tax applies only to trusts established within seven years of the benefactor’s death.
Since the Queen Mother passed away in 2002, this trust is exempt from such taxes. Had she died within that critical period, the tax bill could have soared to approximately £7.47 million.
Interestingly, Prince Harry stands to inherit a more substantial share of the Royal fortune than his elder brother William.
While Prince William will benefit from the Duchy of Cornwall—a private estate designed to fund the public and personal activities of the future King—Harry’s inheritance is anticipated to be just over £7 million, representing slightly more than half of what is designated for the two brothers.
Analysts from Stocklytics surmise, “ The Royal Family most likely would have had a detailed, long-standing financial plan to ensure that not only wealth was transferred from generation to generation, but was also completed in a tax efficient manner.”
Upon her death, the late Queen inherited the Queen Mother’s entire estate, primarily consisting of property. Importantly, the Queen did not incur inheritance tax on her mother’s estate, valued at between £50 million and £70 million, thanks to a deal with John Major’s government that exempted royal bequests from taxation.
In a related context, money-saving expert Martin Lewis has revealed that half of his social media followers are anxious about inheritance tax.
He reassures the public that this tax applies only to estates valued over £325,000. Lewis highlighted that most Britons will likely never encounter this tax, stating, “ only one in 25 estates pay it. Only those at the higher end of the wealth scale are impacted by it, only 4% paid it over the last year, although many more – 30% to 40% of people fear it.”
