Three unusual things about the King's tax bill

Image source, Getty ImagesByMitchell LabiakBusiness reporterPublished4 hours agoKing Charles has made history by revealing his £12.9m tax bill, but the payment is far from ordinary.

The announcement comes alongside the Royal Household publishing its annual financial report.

Here's what the document tells us – and doesn't tell us – about the King's unique tax situation.

King Charles is not legally required to pay income tax, capital gains tax, or inheritance tax.

The MoU came about in 1993 following public pressure over the cost of running the Royal Family and is occasionally updated, most recently in 2023 to reflect the change of monarch following Queen Elizabeth II's death.

The fact that some of the King's taxes are voluntary is not the case for regular taxpayers, and some argue this means that it is not a tax at all.

HMRC defines tax as "money that individual people and businesses are legally required to pay to the government".

Dan Neidle, founder of Tax Policy Associates, told the BBC: "If it's voluntary, it's not tax."

Meanwhile, the report says King Charles pays VAT, employer taxes, and local rates "in line with requirements".

While the Royal Household describes releasing the King's tax bill as part of its "commitment to transparency", it's not clear how it has been figured out.

So although we know that the King has agreed to pay tax on personal income, income from the Privy Purse not spent on official duties, and capital gains tax on private property sales, we don't know what proportion of those taxes make up the £12.9m paid.

It mostly comprises income from the Duchy of Lancaster, an estate that belongs to whoever is the ruling monarch and owns – among other things – the Savoy Hotel in London.