Charles 3rd will have tax-exempt inheritance after gaining wealth by 50% in ten years

King Charles III built his own empire long before he inherited his mother’s.

Charles, who formally ascended the British throne on Saturday, has spent half a century turning his royal estate into a billion-dollar portfolio and one of the most profitable in the royal family’s business.

While his mother, Queen Elizabeth II, largely delegated responsibility for her portfolio, Charles was much more deeply involved in the development of the private estate known as the Duchy of Cornwall. Over the past decade, he has assembled a large team of professional managers who have increased the value and profits of his portfolio by around 50%.

Today, the Duchy of Cornwall boasts the cricket ground known as The Oval, lush farmland in southern England, seaside rental properties, offices in London and a suburban grocery store. (A duchy is a territory traditionally ruled by a duke or duchess.) The 52,600-hectare property portfolio is nearly the size of Chicago and generates millions of dollars a year in rental income.

The conglomerate’s holdings are valued at around $1.4 billion, compared to around $949 million in the late Queen’s private portfolio. These two properties represent a tiny fraction of the royal family’s estimated $28 billion fortune. In addition, the family has personal riches that remain a closely guarded secret.

As king, Charles will take over his mother’s estate and inherit a portion of this untold personal fortune. While British citizens typically pay around 40% inheritance tax, Charles is tax-exempt. And he will pass control of his duchy to his eldest son William to further develop without having to pay corporate taxes.

The growth of the royal family’s coffers and Charles’ personal wealth over the past decade came at a time when Britain faced deep austerity budget cuts. Poverty levels have soared and the use of “food banks” by the poor has nearly doubled.

His palace and polo lifestyle has long fueled accusations that he is out of touch with the common people. And he has been the unconscious symbol of that disconnect — as when his limousine was harassed by students protesting tuition hikes in 2010 or when he perched on a golden throne in royal elegance this year to pledge help to struggling families.

Today, he ascends the throne as Britain suffers a cost-of-living crisis that is likely to exacerbate poverty. A more divisive figure than his mother, Charles is likely to give new energy to those who question the relevance of a royal family in a time of public hardship.

Laura Clancy, author of “Running the Family Firm: How the Monarchy Manages Its Image and Our Money,” said Charles turned dormant royal accounts.

“The duchy has been trading steadily for the last few decades,” Clancy said. “It is run as a commercial company with a CEO and over 150 employees.” What used to be considered simply a “land mound of the landed aristocracy” is now functioning as a corporation, she said.

The Duchy of Cornwall was established in the 14th century as a means of generating income for the heir to the throne, and primarily financed Charles’ private and official expenses. An example of his financial power: the profit of US$ 28 million (almost R$ 145 million) that he made last year exceeded his official salary for a prince – just over US$ 1.1 million (R$ 5.7 million). ).

Classifying the royal family’s assets is tricky, but the fortune usually falls into four groups.

The first and foremost is the Crown Estate, which administers the monarchy’s assets through a council. Charles, as king, will act as its chairman, but he does not have the final say on how the business is run.

The assets, which are officially valued at more than US$19 billion, include shopping malls, busy streets in London’s West End and a growing number of wind farms. Royals are entitled to receive only the income from official real estate and cannot profit from any sales as they do not personally own the assets.

Profits from the estates, valued at about $363 million this year, are turned over to the Treasury, which in return gives the royal family a payment called a sovereign subsidy based on those profits — which must be supplemented. by the government if it is lower than the previous year. In 2017, the government increased the family’s pay to 25% of profits to cover the costs of renovating Buckingham Palace.

The last sovereign grant received by the royals was around $100 million, which the family, including Charles, used for official royal duties such as visiting, payroll and household maintenance. It does not cover royal security costs, which are also paid for by the government but kept secret.

The next big pot of money is the Duchy of Lancaster. This US$949 million (R$5 billion) portfolio belongs to whoever is on the throne.

But the value of that dowry is overshadowed by the Duchy of Cornwall, the third significant royal money home, which Charles long presided over as prince. Generating tens of millions of dollars a year, the duchy financed its private and official spending and supported the heir to the throne, William, and his wife, Kate.

He did this without paying corporate taxes, as most businesses in the UK do, and without publishing details of where the property invests its money.

In 2017, leaked financial documents known as the Paradise Papers revealed that the Dukedom of Charles estate invested millions in offshore companies, including a Bermuda-registered company run by one of his best friends.

The last reserve of money, and the most secret, is the family’s private fortune. According to the Rich List, an annual catalog of British wealth published by The Sunday Times, the queen had a net worth of approximately $430 million. This includes her personal possessions, such as Balmoral Castle and the Sandringham estate, which she inherited from her father. Much of her personal wealth was kept secret.

Charles has also made financial headlines unrelated to his wealth, but to the charitable foundation he presides over and operates on his behalf. His administration of the foundation has been marred by controversy, most recently last spring when The Sunday Times reported that Charles had accepted €3 million in cash — including cash stuffed into shopping bags and in a suitcase — from a former prime minister of Qatar, Hamad bin Jassim bin Jaber al-Thani.

The money went to his foundation, which funds philanthropic causes around the world. Charles does not benefit financially from these donations.

“He’s willing to take money from anyone, really, without questioning whether it’s the sensible thing to do,” said Norman Baker, a former government minister and author of “And What Do You Do? Want You to Know” (What do you do? What the royal family doesn’t want you to know).

Baker described Charles as the most progressive and caring member of the royal family. But he said he also filed a lawsuit accusing him of improperly selling honorary degrees.

“That’s no way for a royal to behave,” Baker said, referring to a current scandal over whether Charles bestowed knighthood and British citizenship on a Saudi businessman in exchange for donations to one of the charitable ventures. real.

Charles denied knowing this, one of his top aides who was involved resigned and authorities began investigating. The king’s representatives did not respond to a message asking for comment.

Clancy, the author, said that the new king, in theory, should completely abandon his lobbies and business ventures.

“Whether that will happen is another question,” she said.