King Charles will avoid paying the inheritance tax because it doesn't apply to the transfer of assets from one sovereign to another.
The King automatically inherited Queen Elizabeth's estate which is estimated to be over £652m, according to The Guardian. UK law states an inheritance tax is applied at 40% to any assets valued above £325,000 but the new monarch will avoid it entirely.
A rule introduced by the UK government in 1993 said inheritance tax does not have to be paid on the transfer of assets from one sovereign to another. Then Conservative Prime Minister Sir John Major said "unique" arrangements needed to be put in place overwise assets may be watered down through capital taxation over generations.
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Speaking to the House of Commons, he said: "I believe that is necessary to protect the independence of the monarchy, and I would not wish to detract from that independence in any way.
"The concerns that I would have were the arrangements to be any other would be the danger of the assets of the monarchy being salami-sliced away by capital taxation through generations, thus changing the nature of the institution in a way that few people in this country would welcome."
A Memorandum of Understanding on royal taxation from 2013 also stated the royal family needs private assets to fulfil their roles along with a level of independence from the government. It said it would be "inappropriate" to impose an inheritance tax on assets "which are held by the Queen as sovereign rather than as a private individual."
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