Inheritance Tax and Peerage?

Question

UK has an Inheritance Tax, just like the US.

- Is the peerage in the UK exempt from this tax? How do they end up keeping those big palaces for five hundred years? I understand that the Duke of Westminster owns 300 acres in Central London. Is his son going to get all of that?

- Will there be a drive to take away these beautfiul "grace and favor" homes that have been lived in for decades by the Queen's cousins, or will they pass down to the children of the cousins. For example, the queen's cousin, Princess Alexandra (age 71), lives in "Thatched House" Lodge in Richmond Park for 45 years. The house is a 6 bedroom, 6 reception room, house on 4 acres of land in the middle of Richmond Park. On her death does this incredibly valuable piece of property go to her children, or does it's disposition become at the will of the next sovereign.

- How about those apartments in Kensington Palace which are worth millions. Currently I think they are given to three of the queen's cousins.

Answer 1

Those holding nobility titles are NOT exempt from the inheritance tax.

The Queen's private estate (shareholdings, personal jewelery, Sandringham House and Balmoral Castle) will be subject to Inheritance Tax.

The Queen does not own the Royal Palaces, works of art from the Royal Collection or the Crown Jewels. These are held by Her Majesty as Sovereign and must be passed to her successor in due course.

A better example is what happened over the last century with the estates of The Dukes of Devonshire and not being able to afford death duties, so they've been forced to sell most of their properties, personal art collections, books collections, etc.

When the 10th Duke died, his successor had to  pay almost 80 % of the whole state in death duties.

At the begining of the 20th century they owned over 80K of acres and today they were able to keep just few thousands of them.

In 1981 the Duke of Devonshire's trustees created a separate charitable trust called the Chatsworth House Trust to preserve the house and its setting. This trust was granted a 99-year lease on the house, its essential contents, the garden, park and some woods, a total of 1,822 acres. The family is represented on the trust council, but there is a majority of non-family members.

Chatsworth House in the residence of the Duke and his family, They moved there after selling the other houses they owned. The Duke pays a market rent for the use of its private apartments in the house.

..edit..

On your comment about Thatched House, I believe Princess Alexandra and her husband, Sir Angus Ogilvy, acquired it on a 150 years lease from the Crown Estate.

Answer 2

The Peerage are not exempt from these taxes.That is why many aristocrats no longer have their "family seats." Many who still do resort to selling their treasures to keep up with taxes.Others have home tours.

Royals are different from the peerage. Some of the more private properties(that aren't part of palace/castle estates) may end up being sold to pay taxes.

When Princess Margaret died,her children sold jewelry,paintings,furniture to pay taxes.

Kensington Palace is part of the crown properties,i.e.,it's not private property and is for use of the sovereign.The Queen's family may use them.

Answer 3

Many of them revert back to the Crown.They are not owned by the Queen but by the nation.Much the same as the crown Jewels,much of the art and the working palaces.