People who are residing in the UK often enquire about does UK tax go to the Royal Family or if they have the tax implications as normal people do. This has become the talk of the town after the demise of the Queen. However, if we put the discussion in simple words, we will say that the UK tax partially goes to the Royal family and people are not expecting wrong in the UK. A sovereign Grant is the most common way the tax goes to the Royal family. Moreover, this is imperative to understand here that if the tax goes partially to them, how much of that amount of the taxpayers is being used for this purpose?
You must be the one who is curious about learning the facts about the tax implications of the Royal family, how much of the tax amount goes to them, what is the role of the UK Royal family to make a better economy, and what is the Sovereign Grant Act. If so, you are on the right page as we will delve further into the discussion about everything that you aim to learn.
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What is Sovereign Grant Act in the UK
The sovereign Grant Act refers to a way out that is used to pay funds to the Royal family in the UK. The government introduced it in the year 2011. A few salient features related to the Sovereign Grant Act are listed below:
- The amount of money is sent by the HMRC and this is the money that the taxpayer has paid in form of the tax.
- This is also used to pay for the maintenance of the Royal house and its staff of it.
- The payment goes to the Royal family on an annual basis.
- The income that the Royal family receive through the Sovereign Grant is not taxable, so they do not have to pay any kind of tax on it.
- Royal Family’s official duties are also funded through the amount of tax that goes to them and the garden parties are arranged through it.
- The amount of the Sovereign Grant is £86 million within the time frame of the year, however, the amount can be exceeded on an immediate basis if the Royal family needs anything urgently.
Do Taxpayers Pay for Everything in the UK?
You will be surprised to hear that the amount of £86 million within a year is still not enough to meet the standard of living costs in the UK family. So we can say that the taxpayers are not paying for everything in the UK. There are other income streams that provide for the living cost of the UK Royal family. Some examples of these multiple income streams are:
- An investment portfolio
- Artwork and other personal assets
- Balmoral Castle and other inheritance estates
- There are many other income streams in form of the private assets that poll in the income and make around £24 million within the time limit of a year.
What is the Part of the UK Family in the Betterment of the UK Economy?
It is better understood by many of us that the UK Royal family takes a major part of the tax money for the sake of official duties, security, maintenance, and central staffing as well. The question that arises here is what is the revenue that is generated in the economy because of the Royal family and how it works for the betterment of the economy. Another factor to focus on here is the amount coming from tourism.
If you are a tourist who loves to explore new places, you would have the idea that when you are visiting the UK, you will never want to skip the Royal places like Buckingham Palace, Frogmore House, and Windsor Castle. This tourist attraction has become a reason to earn millions more for the living cost of the UK Royal family. Publishing, hampers, Souvenirs, and gift shop sales are also a way to bring revenue for the economy from the Royal family. In simple words, the Royal family has the ability to add an amount of around £71 million pounds within a year. This is just because they are the Royals.
Are Tax Implications the Same for the UK Royal Family?
There are no tax liabilities for the UK Royal family, however, there are a few exceptions in some cases. We can take the example of the Queen who chooses to pay the tax voluntarily on the profit of capital gains and a part of the income. Moreover, the interesting factor here is that there is no tax implication in the sovereign-to-sovereign inheritance. There is no such tax liability of the standard tax rate of 40% the way it is for the normal people residing in the UK. However, there are some voluntary practices for paying the income tax because the tax rules become different when it comes to the Royal family in the UK.
The Bottom Line
Now that we have gathered a fair amount of information about ‘does UK tax go to the Royal Family, we can bring the discussion towards wrapping up. We can not deny the fact that a large portion of the UK taxpayers goes to the UK Royal family and the tax implications become different in the case of this family in the UK. However, the members of the family voluntarily pay some taxes in form of income tax and others. We hope these few minutes of reading will help you to develop a better understanding of the Royal family tax implications in the UK.
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