King Charles abandons Buckingham Palace as home, reveals £12.9m voluntary tax bill

A break with tradition

King Charles III will not live at Buckingham Palace after its 10-year, £370 million refurbishment ends next year, the monarch confirmed alongside the Royal Household's annual financial report. The decision ends a nearly two-century tradition of the London landmark serving as the monarch's primary private residence. Instead, the King and Queen will continue to live at Clarence House, the somewhat secluded palace just north of The Mall where they have resided since 2003 and where Charles lived as a child.

Buckingham Palace will be a buzzing hive of royal activity in every other way, despite the King not living there.

The move was motivated in part by a desire to expand public access to Buckingham Palace. Security protocols required while the sovereign is in residence restrict both visitor numbers and the areas open to the public. Windsor Castle will remain the weekend retreat, Sandringham will host Christmas festivities, and Balmoral will continue as the family's summer home. Highgrove House, the estate that best represents the King's environmental vision, rounds out the portfolio of royal residences whose roles remain unchanged.

An unprecedented tax disclosure

The King has become the first monarch in modern times to reveal his tax bill, paying £12.9 million in the most recent tax year and a total of £24.6 million across the last two years. He is not legally required to pay income tax, capital gains tax, or inheritance tax. Instead, these payments are made voluntarily under a Memorandum of Understanding with the government, an arrangement dating back to 1993 following public pressure over royal finances. The MoU was last updated in 2023 to reflect the change of monarch.

If it's voluntary, it's not tax.

The reported £12.9 million sum combines income tax and capital gains tax on the King's private income from the Duchy of Lancaster, which received £25.2 million for the year to 31 March. The Duchy is a portfolio of land, property (including London's Savoy Hotel), and businesses whose revenues flow to the reigning monarch. However, the Royal Household provided no breakdown of how the final tax figure was calculated, nor what proportion of the Privy Purse income was spent personally versus on official duties. The monarch only voluntarily pays tax on income spent personally, meaning official royal business effectively reduces the taxable amount.

Dual funding streams

The King's official work is financed by two tax-free channels. The Sovereign Grant, paid from the Treasury to the Royal Household, covers staff costs, running expenses, and extensive palace renovations. This grant has run at roughly £150 million annually in recent years due to refurbishment costs and is projected to nearly double within three years. Separately, untaxed Privy Purse funds can pay for the personal incomes of working members of the Royal Family, a category that has no parallel for ordinary self-employed taxpayers.

While Royal finances can sometimes appear complex, the underlying system is clear in principle, structured in law and refined over time to ensure the Monarch can serve with independence, accountability and in the long-term interests of the nation.

The broader Crown Estate, which generates over £1 billion annually from rents, leases, and offshore wind farms, is held in the name of the Crown but its revenues flow directly into the national budget. The monarch has no personal access to these funds.

Calls for transparency and what remains hidden

Buckingham Palace described the publication of the King's and Prince William's tax figures as part of a "commitment to transparency" intended to foster wider understanding of royal accountability. The revelation places the King among the top 100 UK taxpayers. Historian Anna Whitelock noted that the disclosure provides a headline figure but little insight into its composition, while BBC analysis highlighted that the exact share of the £12.9 million attributable to personal spending, as distinct from official expenditure, remains undisclosed.