Question to the HM Treasury:

To ask His Majesty's Government what plans they have, if any, to introduce legislation to levy inheritance tax on the estate of the Monarch.

Answered by Lord Livermore

Inheritance tax is paid in the normal way on the gifts and bequests from any member of the royal family, with the exception of the Monarch because the relevant enactments do not apply to the Crown.

The King has instead agreed that inheritance tax will be paid voluntarily on any gifts and bequests he makes, with an exception for assets passing to the next Monarch. The Memorandum of Understanding (MoU) on Royal Taxation, first agreed in 1993 and most recently renewed in 2023, sets out the rationale for not charging inheritance tax in relation to assets that pass to the next Monarch.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the merit of replacing the Sovereign Grant by a Royal Duties Grant similar to the former Civil List which would be considered and approved by Parliament annually.

Answered by Lord Livermore

The rules governing the Sovereign Grant are set out in the Sovereign Grant Act 2011. This Act requires a review following every five-year period to ensure the percentage of Crown Estate profits used in the calculation of the Grant remains appropriate.

The most recent Sovereign Grant Review was published on 26 June this year. The Royal Trustees concluded that a reference rate of 20.5 per cent is appropriate for the funding formula from 2027-28 onwards, which equates to a 2027-28 Grant amount of £99.9 million, a reduction against the £137.9 million in 2026-27.

The Government is committed to bringing forward legislation to enable the Grant to be reset to that lower level from 2027-28 and will bring forward the Sovereign Grant Bill when parliamentary time allows. This Bill will also introduce a mechanism so that in future years, the Grant can be reduced from one year to the next, preventing inappropriately high funding without the need for further primary legislation. This legislation will enable further parliamentary debate to occur.