Introduction
The British royal family have multiple sources of income, but they’re still not as rich as you might expect. Media reports have estimated the Queen’s personal fortune is worth up to £360 million. The royal family receives most of their income from the government and their private estates.
The sovereign and the wider royal family have three main sources of income – the crown estate, the Duchy of Lancaster and the Duchy of Cornwall – much of it derived from centuries-long ownership of land and property across the country, including in central London, and even the seabed around swathes of the British Isles, amounting to assets with a combined value of more than £17 billion.
Sovereign Grant
What is the Sovereign Grant?
The Sovereign Grant is an annual lump sum from the government in support of The Queen’s Official duties. It is essentially an expense account for the Royal Family to pay for royal duties, such as receptions and garden parties and visiting schools. Most of the grant was spent on the cost of maintaining occupied royal palaces such as the Buckingham Palace, Windsor Castle, and their staff pay.
The Sovereign Grant is generated from the Crown Estate, a collection of UK properties and farms that generate hundreds of millions of pounds each year. The vast majority of earnings from the Crown Estate go into government coffers, but a portion of the profits – between 15% to 25% – are given to the Queen in the form of the Sovereign Grant.
The payment is based on the profits of the Crown Estate, a property business owned by the monarch but run independently. It is not the private property of the Queen – it merely belongs to the monarch for the duration of their reign. This means the Queen can’t sell the Crown Estate or keep the revenue for herself.
Normally, the Queen is given 15% of the Crown Estate profits from the previous two years, with the government keeping the remainder. However, it was agreed that from 2017 she would receive 25% for the following 10 years. This is to help pay for a £369m refurbishment of Buckingham Palace. Last year £55m was spent on efforts to accelerate work on Buckingham Palace in time for the Platinum Jubilee.
What does it consist of?
The Crown Estate’s portfolio includes sizeable chunks of central London – the monarch is one of the largest property owners in the West End, including St James’s and Regent Street – as well as farmland, offices and retail parks from Southampton to Newcastle.
It also owns the seabed and half the foreshore around large parts of England, Wales and Northern Ireland, an asset that has become increasingly lucrative since the North Sea oil boom and, more recently, auctions of plots for offshore windfarms. The crown estate is also responsible for managing the whole of the Windsor estate, which spans nearly 16,000 acres and includes parkland and ancient woodland, as well as the Ascot racecourse.
When
The Crown Estate was originally the name for lands owned by the monarch – it dates from the time of the Norman Conquest. In 1760, King George III reached an agreement with the government to surrender his income from the Crown Estate. In return, it was agreed that the King (and his successors) would receive a fixed annual payment, now called the Sovereign Grant.
What’s the amount?
For the year ended 31 March 2022, the Crown Estate holds a net asset of GBP 16.5 billion, and has generated a net profit of GBP 313m, which was an increase from the previous year as rent collection rebounded after the pandemic, and thanks to the growth in offshore wind. For 2021-2022 the Sovereign Grant was set at £86.3m – equivalent to £1.29 per person in the UK.
Duchy of Lancaster
What is Duchy of Lancaster & Purpose
If the Sovereign Grant is an expense account of sorts, the Duchy of Lancaster includes the monarch’s actual income. Dating back to 1265, the Duchy of Lancaster is a private estate of land, property and assets incorporated by Royal Charter and held in trust for the benefit of the Monarch as Duke of Lancaster. It is administered separately from the Crown Estates. Its main purpose is to provide an independent source of income, and is used mainly to pay for official expenditure not met by the Sovereign Grant (primarily to meet expenses incurred by other members of the Royal Family).
When
The duchy was established more than 700 years ago and its estates have belonged to the monarch – who also carries the title of Duke of Lancaster – In 1399 King Henry IV announced the Lancaster inheritance would be held separately from all other Crown possessions, and would descend through the Monarchy as a private estate.
What does it consist of?
The duchy owns more than 18,000 hectares of land in England and Wales, the majority of which is in Lancashire, Cheshire, Yorkshire, Staffordshire and Lincolnshire, and which including farms, homes and commercial properties. The duchy also has assets including shops, offices and commercial buildings, many of which are in the Savoy area of central London, alongside some financial investments and homes.
In addition, the duchy owns limestone and sandstone quarries stretching from south Wales to North Yorkshire, which supply material to the UK’s construction industry. The duchy has rights to the foreshore from the midpoint of the River Mersey to Barrow-in-Furness.
How it works
The Monarch is entitled to the income generated by His Duchy, but is not entitled to the Duchy’s capital nor to capital profits. Land may be bought and sold, and long leases granted, but sales of assets are strictly controlled and are sympathetic to retaining the Duchy’s core estates. Revenue generation is balanced against the need to provide an income for future generations of Sovereigns.
What’s the amount?
At the end of March 2022, the Duchy of Lancaster had £652.8m of net assets under its control, delivering net surplus of £24.0m.
The Duchy of Cornwall
What is Duchy of Cornwall & Purpose
The Duchy of Cornwall is a private estate, held in trust for The Prince of Wales as heir to the throne. The revenues from the estate are passed to The Prince of Wales and Duke of Cornwall, who chooses to use them to fund his public, charitable and private activities and those of his family. According to reports, Prince Charles and his wife, Camilla received their 90% of their income from the Duchy of Cornwall. The Duchy also provides income to the rest of the royal family, including Prince William and Kate, and formerly Prince Harry and Meghan Markle. Prince Charles’ siblings, Princess Anne, Prince Andrew, and Prince Edward, are paid through the Duchy of Lancaster.
When
The Duchy estate was created in 1337 by Edward III for his son and heir, Prince Edward, and its primary function was to provide him and future Princes of Wales with an income from its assets. Prince Charles became the 24th Duke of Cornwall on The Queen’s accession in 1952. Since Prince Charles inherited the Duchy of Lancaster on accession to the throne, the Duchy of Cornwall passed to his eldest son, William, when he became heir to the throne and the 25th Duke of Cornwall.
What does it consist of?
The Duchy of Cornwall is one of the largest and oldest estates in Britain. It includes more than 52,450 hectares of land across 20 counties in England and Wales, stretching from Devon to Kent, and Nottinghamshire to Carmarthenshire. Much of the estate comprises farmland, but it also includes homes and commercial properties, forests, rivers and coastline, as well as the Oval cricket ground in central London, and Dartmoor prison. The Duchy also has a financial investment portfolio. The duchy’s net assets were valued at more than £1bn at the end of March 2022, and the estate paid Charles an income of £21m for the year ending 31 March 2022, according to the duchy’s annual accounts.
How it works
It was traditional for many centuries for families with landed estates to settle the land and other assets in trust, so that each generation could live off the income but was unable to sell the assets. This was done to ensure that the estate, and the income which it provided, survived from generation to generation. The same principle was applied to the Duchy of Cornwall. Under the 1337 charter, The Prince of Wales does not own the Duchy’s capital assets, and is not entitled to the proceeds or profit on their sale, and only receives the annual income which they generate. The Duchy’s founding charter stated that the Duchy should be in the stewardship of the Heir Apparent, to provide the Heir with an income independent of the Sovereign or the State. He is in effect a trustee, and is not entitled to the proceeds of disposals of assets. The Prince must pass on the estate intact, so that it continues to provide an income from its assets for future Dukes of Cornwall.
What’s the amount?
From their 2022 annual report, the Duchy currently owns a net asset of 1 billion pounds, has generated around 23 million pounds of distributable surplus this year, which the couple Prince Charles and Camilla were entitled to.
Is it taxed?
The Duchy is tax exempt, but The Prince of Wales voluntarily pays income tax at the highest rate 45% on the duchy’s earnings.
Additional income (Castles, stocks, and stamps)
The Queen also has her own personal assets, including Balmoral Castle in Scotland, and the Sandringham Estate in the east of England. Both were inherited from her father and are beloved family retreats. The Queen also owns a royal stamp collection has been estimated at £100m, numerous works of art and a stock portfolio.
Does the monarch pay taxes?
Before her death, the queen voluntarily paid income tax and capital gains tax since 1992; any income received from the Duchy of Lancaster that doesn’t go to official expenses was taxed as well. She was subject to Value Added Tax also voluntarily paid local taxes.
Prince Harry and Meghan
Royals who work for the Crown full time aren’t allowed to earn any money from outside sources, however, that rule doesn’t apply to Prince Harry and Meghan. In the January 2020 the couple has announced their intention to step back from royal duties, and stated their desire to “work to become financially independent.”
In September 2020, it was confirmed that Prince Harry was no longer receiving funds via the Duchy of Cornwall. That same month, the couple also announced that they’d paid back the £2.4 million in public money taken from the Sovereign Grant that was used to renovate their Windsor Home, Frogmore Cottage.
But in their interview with Oprah, Harry and Meghan revealed they’d actually stopped being paid in the first quarter of 2020—much earlier than discussions about their departure had led them to believe. “My family literally cut me off financially, and I had to afford security for us,” Harry said, voicing concerns for their son Archie’s safety without the security detail the royal family had revoked.
Harry said they’d been living off of his share of the inheritance his mother, Princess Diana, left to him and his brother William after her death in 1997. According to The Independent, after taxes, the half that Harry received upon turning 25 amounts to around $13 million USD.
In order to make a living, Prince Harry has signed a USD 20 million deal for several books including his memoirs. The couple has also inked a very lucrative Netflix deal, estimated to be worth between USD 100-240 million, and are producing podcasts with Spotify, and Apple TV+. In August 2022, Markle launched her own podcast, Archetypes.
