Reason Prince Harry avoids inheritance tax on £7m Queen Mother gift explained by experts

Harry & Meghan
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Prince Harry is set to inherit a substantial fortune on his 40th birthday on Sunday (September 15), with experts predicting he won't have to pay a penny in tax. The Duke of Sussex will receive the final installment of the late Queen Mother's £19million trust fund, estimated to be around £7m.

According to investment company Stocklytics, the Royal Family has avoided HMRC's normal rules due to the way the Queen Mother's estate was planned and her longevity. The experts said: "With Prince Harry set to receive the final instalment of the Queen Mother's trust fund, valued at £19 million, many Brits may be asking how much inheritance tax he'll pay - especially as the latest judicial reviews have cost the taxpayer £500,000 each.

"However, due to the way the Queen Mother's estate was planned and how long she lived, it is likely HMRC will not receive a penny in inheritance tax.

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"According to current regulations, inheritance tax only applies to a trust if it was set up within seven years of the individual's death. However, since the Queen Mother died in 2002, this trust would no longer be subject to inheritance tax.

"If the Queen Mother had died within the 7 years a trust is subject to inheritance tax, HMRC could have been owed up to £7.47 million," reports the Express.

Harry will receive a larger share of the generous bequest than his older brother due to the Royal Family's financial management.

As the future monarch, Prince William stands to inherit the substantial riches of the Duchy of Cornwall, a private estate that funds the public, charitable, and personal endeavours of the King's successor. Consequently, Prince Harry is expected to receive just over half of the £14m allocated for the siblings.

Prince Harry
Prince Harry

Stocklytics analysts commented: "The Royal Family most likely would have had a detailed, long-standing financial plan to ensure that not only wealth was transferred from generation to generation, but was also completed in a tax efficient manner.

"It is understood the late Queen received the Queen Mother's entire estate upon her death, mostly of which consisted of property. The Queen did not have to pay inheritance tax on her mother's estate, valued at between £50m and £70m. This is due to a deal reached with John Major's government, which meant the sovereign's bequests are not liable to taxation."