Three key royals who suffered brutal financial hit when the late Queen died

Three key members of the Royal Family may have missed out on the late Queen's illustrious wealth to avoid paying inheritance tax due to a little-known rule about how the royals are taxed. King Charles's siblings, Princess Anne, Prince Edward, and Prince Andrew, likely did not inherit anything from Queen Elizabeth's £380million fortune after a rule specified that only assets from one monarch to their successor are exempt from taxation.

The Royal Family is exempt from the standard inheritance tax rules after a clause agreed upon by Sir John Major's Government in 1993, which stated that any "transfers of assets from one sovereign to his or her successor" avoid the 40% charge applied to assets valued at more than £325,000. It also stated that inheritance passed from the consort of a former sovereign to a sovereign is also exempt from inheritance tax.

Sir Major's agreement was made at the time to "prevent the dilution of the Crown's wealth and ensure the continuity of the monarchy's functioning."

This meant that if any of the King's siblings inherited any of their mother's illustrious wealth and assets, they would be subject to inheritance tax.

It is not known whether Anne, Edward and Andrew received anything from the late Queen's inheritance or were taxed for it when their brother wasn't.

The guidance said: "The monarchy as an institution needs sufficient private resources to enable it to continue to perform its traditional role in national life."

The Crown Estate has an administering property worth £15.6 billion, but out of its revenue, only 25 % is given to the monarch as the Sovereign Grant, while the other 75 % goes to the Treasury.

Charles oversees the Sovereign Grant, which supports the official duties of the Royal Family and was set at £132million for 2024-25.

According to the Government's guidance, anyone else inheriting private assets from a sovereign, in this case, the late Queen, would be subject to tax.

It stated: "In relation to assets which can properly be regarded as private, the arrangements provide that inheritance tax will not be paid on gifts or bequests from one sovereign to the next, but will be payable on gifts and bequests to anyone else."