TL;DR
Legal and General has taken over management of pension schemes for staff of the Royal Household, as King Charles's tax arrangements attracted renewed scrutiny. The King paid £13 million in tax in 2024-25 on income from the Duchy of Lancaster, which is disclosed voluntarily. The Duchy of Lancaster is exempt from corporation tax under the Duchy of Lancaster Act 1817 but the Sovereign pays income tax and capital gains tax voluntarily on personal income.
Last reviewed: 26 June 2026 | Sources: FCA, GOV.UK, HMRC
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Key Facts King's tax payment: £13m (2024-25)Duchy income source: Duchy of LancasterCorporation tax: Exempt under 1817 ActIncome/CGT: Paid voluntarily by Sovereign |
The King's tax arrangements
King Charles III paid approximately £13 million in income tax and capital gains tax for the 2024-25 tax year on personal income derived from the Duchy of Lancaster, according to figures released by Buckingham Palace. The Sovereign pays these taxes voluntarily -- there is no statutory obligation -- under a memorandum of understanding between the Royal Household and HM Treasury. The arrangement has been in place since 1992 when the Queen agreed to pay income tax voluntarily.
The Duchy of Lancaster is a private estate belonging to the Sovereign in right of the Crown. It comprises approximately 18,000 acres of land and property assets generating rental and commercial income. Under the Duchy of Lancaster Act 1817, the Duchy is exempt from corporation tax. The Sovereign receives the surplus income after estate management costs and pays income tax on this personally, at the normal higher and additional rates applicable to the level of income received.
Legal and General takes over Royal Household pension management
Legal and General, one of the UK's largest institutional fund managers with over £1 trillion in assets under management, has taken over management of pension schemes covering staff of the Royal Household and associated Crown institutions. The move continues a trend of smaller defined benefit scheme closures and consolidation into bulk purchase annuities and master trust arrangements with larger institutional managers.
Legal and General's Institutional Retirement division is a major provider of pension risk transfer, including bulk annuity (buy-in and buyout) transactions and longevity swaps for UK defined benefit pension schemes. The Royal Household scheme is a defined benefit arrangement for staff employed directly by the Monarch.
Sovereign Grant and public finance
The Sovereign Grant, which funds the official duties of the Monarch, is calculated as a percentage of Crown Estate profits and is paid from the Consolidated Fund. For 2024-25, the Sovereign Grant was approximately £86 million, covering official travel, Household payroll, property maintenance at occupied palaces, and other official costs. The Sovereign Grant is separate from the Duchy of Lancaster income, which the King receives as a private person and on which he pays income tax voluntarily.
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Disclaimer This article is for information only and does not constitute financial or legal advice. Kael Tripton Ltd is an independent editorial publisher and is not regulated by the FCA. |
Frequently asked questions
Does the King pay income tax?
Yes, voluntarily. The Sovereign pays income tax and capital gains tax on personal income under a memorandum of understanding with HM Treasury that has been in place since 1992. There is no statutory obligation. King Charles paid approximately £13 million in 2024-25 on income from the Duchy of Lancaster.
What is the Duchy of Lancaster?
The Duchy of Lancaster is a private estate belonging to the Sovereign in right of the Crown, comprising approximately 18,000 acres of land and property assets. It generates rental and commercial income. Under the Duchy of Lancaster Act 1817, the Duchy pays no corporation tax. The surplus income is paid to the Sovereign who pays personal income tax on it voluntarily.
Is the Sovereign Grant taxpayer money?
The Sovereign Grant is funded from Crown Estate profits, which belong to the nation. The Crown Estate is managed separately from the Duchy of Lancaster. Sovereign Grant funds official duties only -- travel, payroll, property maintenance. It is audited by the National Audit Office and scrutinised by the Public Accounts Committee.
What is a bulk annuity in pension terms?
A bulk annuity is a transaction where a defined benefit pension scheme transfers some or all of its pension liabilities to an insurer, which then becomes responsible for paying the pensions. Legal and General is one of the largest providers of bulk annuity transactions in the UK. The employer and scheme trustees are discharged from future pension liability in exchange for a premium paid to the insurer.
Are Royal Household employees in a defined benefit pension?
Royal Household staff are understood to be members of a defined benefit pension scheme, which provides a pension based on salary and length of service rather than investment returns. DB schemes are increasingly rare in the private sector but remain common in the public sector and some institutional employers. The management of the Royal Household scheme has passed to Legal and General.
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Sources Buckingham Palace: Annual Report |
