What will happen to Prince Philip’s multimillion pound estate?
- Wills, Trusts & Probate
- 30th Jun 2021
On 9 April 2021, at the grand age of 99, his Royal Highness Prince Philip, Duke of Edinburgh, sadly passed away. He was the longest-serving royal consort in British history, having been married to Her Majesty the Queen for more than seven decades. The question that is now starting to surface for probate practitioners is “what […]
By aleksMLP Law
On 9 April 2021, at the grand age of 99, his Royal Highness Prince Philip, Duke of Edinburgh, sadly passed away. He was the longest-serving royal consort in British history, having been married to Her Majesty the Queen for more than seven decades.
The question that is now starting to surface for probate practitioners is “what will happen to Prince Philip’s multimillion pound estate?”.
The current legal position states that there is normally no Inheritance Tax to pay if “you leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club”.
If plans were in place for all of Prince Philip’s estate to be handed to the Queen, the Queen could be exempt from paying Inheritance Tax on the Duke of Edinburgh’s private wealth under a legal clause which was agreed by former Conservative Prime Minister, John Major, in 1993. The clause was created to allow inheritance to pass from “sovereign to sovereign” or the consort of a sovereign to a reigning monarch. This was also applied to the Queen Mother’s estate, despite her not being the sovereign or ever having been, ultimately protecting the Queen from being handed an Inheritance Tax bill in the region of £20 million.
Whilst there isn’t a clear indication of Prince Philip’s exact wealth that could be inherited tax-free by the sovereign, there have been several speculations. Some sources have suggested that it could be between £10 and £30 million. Of course, once Probate has been granted, then this is a public document and it will be possible to ascertain what the gross and net values of his estate were.
If the Duke of Edinburgh decided to leave his bequest to other members of the Royal Family besides the Queen, they could be faced with paying an Inheritance Tax bill of millions. Throughout his 99 years, Prince Philip was associated with hundreds of charities in one capacity or another, either as a president, patron or honorary member. If the Duke of Edinburgh decided to leave his entire estate to one of the hundreds of charities he supported, there would additionally be no Inheritance Tax to pay. Alternatively, his estate may qualify for a reduced rate of 36 per cent payable in Inheritance Tax if he has decided to leave at least 10 per cent of his net estate to charity.
When the Queen does eventually pass away, her wealth will likely be inherited by her eldest son and immediate successor to the throne, Prince Charles, who will also be exempt from an Inheritance Tax bill as the new sovereign. However, if the Queen does choose to leave any part of her estate to any of her other issue or relatives, Inheritance Tax will be payable.
Many people ask the question – “Why should a monarch receive special treatment for Inheritance Tax?”. The rationale behind this is that the monarch is not able to work or trade, therefore is not able to “grow” their estate as the average person would throughout their lifetime. Additionally, if the monarch’s estate was repeatedly subject to Inheritance Tax then their level of wealth would drop dramatically.
For the average individual, Inheritance Tax is currently charged at 40 per cent on the value of an estate above the nil rate band, which is currently £325,000 for an individual. In order words, a deceased can pass on up to £325,000 of wealth tax-free. Married couples and civil partners are entitled to double the allowance to £650,000 before tax is payable.
Inheritance Tax is a significant part of the estate administration process and it is one area that tends to cause families dealing with a bereavement a significant amount of stress. Additionally, Executors and Administrators are legally and financially responsible for ensuring the tax is dealt with correctly. It can often be difficult to understand which is why clients often turn to use experts in this area of law.
If you have any questions arising regarding probate or inheritance tax, please contact the Wills, Trusts and Probate team at MLP Law on 0161 926 9969 or email email@example.com
About the expert
Stephen is the Owner of MLP Law and leads our Commercial, IP and Dispute Resolution teams which provide advice on all aspects of the law relating to mergers, acquisitions, financing, re-structuring, complex commercial contracts, standard trading terms, share options, shareholder and partnership agreements, commercial dispute resolution, joint venture and partnering arrangements, IT and Technology law, Intellectual Property, EU and competition law, Brexit and GDPR.
Interested in working with Stephen?
Let’s start by getting to know you and your business - either on the phone or in person. Complete the form below and we’ll be in touch shortly.