Finances of the British Royal Family
Encyclopedia
The British Royal Family
receives money from a number of sources both public and private. The official reported annual cost to the British Public of keeping the Royal Family was £41.5M for the 2008-09 period. This figure is disputed as the real cost since it does not include the cost of security provided by the Police and the Army, the lost revenue of the Duchies of Cornwall and Lancaster and other expenses.
Parliament meets much of the sovereign's official expenditure from public funds, known as the Civil List
and the Grants-in-Aid
. An annual Property Services Grant-in-Aid pays for the upkeep of the royal residences, and an annual Royal Travel Grant-in-Aid pays for travel. The Civil List covers most expenses, including those for staffing, state visits, public engagements, and official entertainment. Its size was fixed by Parliament every 10 years; any money saved was carried forward to the next 10-year period.
From 2013, the Civil List and Grants-in-Aid will be replaced by a single Sovereign Grant, which will be 15% of the surplus generated by the Crown Estate
.
to be between £134 and £184 million per year. Other sources estimate it to be around £118 million.
In comparison the Spanish Royal Household costs 8.9M Euro or around £7.4M. According to the British Republican campaign, the Irish Republic Presidency £1.8m and the German Presidency £26m.
Until 1760 the monarch met all official expenses from hereditary revenues, which included the profits of the Crown Estate
(the royal property portfolio). King George III
agreed to surrender the hereditary revenues of the Crown in return for the Civil List, and this arrangement persists. The Crown Estate is one of the largest property owners in the United Kingdom, with holdings of £7.3 billion in 2011. It is held in trust, and cannot be sold or owned by the Sovereign in a private capacity. In modern times, the profits surrendered from the Crown Estate have exceeded the Civil List and Grants-in-Aid. For example, the Crown Estate produced £200 million for the Treasury in the financial year 2007–8, whereas reported parliamentary funding for the monarch was £40 million during the same period.
From 2013, the Civil List and Grants-in-Aid will be replaced by a single Sovereign Grant, which will be 15% of the surplus generated by the Crown Estate
. The changes were introduced by the Sovereign Grant Act 2011
. The annual amount will be calculated on the revenue from two years previously, and the arrangements will be reviewed by 2020.
Forbes magazine estimated the Queen's net worth at around US$450 million in 2010, Official Buckingham Palace statements in 1993 called estimates of £100 million "grossly overstated", and Jock Colville, a former private secretary of the Queen and a director of her bank, Coutts
, estimated her wealth at £2 million in 1971 (the equivalent of about £ today).
is Head of the Privy Purse and Treasurer’s Office and has overall responsibility for the management of the sovereign’s financial affairs.
and Windsor Castle
are held in trust and do not belong to the Sovereign personally.
, a property portfolio valued at £383 million in 2011, are held in trust. The revenues of the Duchy form part of the Privy Purse
, and are used for expenses not borne by the Civil List.
in Norfolk
and Balmoral Castle
in Aberdeenshire
are privately owned by the Queen.
, which includes artworks and the Crown Jewels
, is not owned by the Queen personally and is held in trust
.
way. There is a Memorandum of Understanding on Royal Taxation which records the arrangements for the payment of tax by the Queen and the Prince of Wales. Only a proportion of capital gains arising on assets belonging to the Privy Purse are subject to capital gains tax the Memorandum of Understanding justifies this on the basis that the Privy Purse meets both public and private expenditure. The proportion of gains and losses to be taken into account is:
The Prince of Wales is not required to pay tax on his income from the Duchy of Cornwall
but in all other respects is subject to tax in the normal way. In 1969 Prince Charles made voluntary tax payments of 50% of profits from the Duchy but this reduced to 25% in 1981 when he married Princess Diana.
The Official Expenditure of the Queen and the Prince of Wales is regarded as tax deductible, the rules on what constitutes Official Expenditure are set in the Memorandum of Understanding. Property passing from monarch to monarch is exempt from Inheritance Tax, as is property passing from the consort of a former monarch to the current monarch.
British Royal Family
The British Royal Family is the group of close relatives of the monarch of the United Kingdom. The term is also commonly applied to the same group of people as the relations of the monarch in her or his role as sovereign of any of the other Commonwealth realms, thus sometimes at variance with...
receives money from a number of sources both public and private. The official reported annual cost to the British Public of keeping the Royal Family was £41.5M for the 2008-09 period. This figure is disputed as the real cost since it does not include the cost of security provided by the Police and the Army, the lost revenue of the Duchies of Cornwall and Lancaster and other expenses.
Parliament meets much of the sovereign's official expenditure from public funds, known as the Civil List
Civil list
-United Kingdom:In the United Kingdom, the Civil List is the name given to the annual grant that covers some expenses associated with the Sovereign performing their official duties, including those for staff salaries, State Visits, public engagements, ceremonial functions and the upkeep of the...
and the Grants-in-Aid
Grant-in-aid
A grant-in-aid is money coming from central government for a specific project. This kind of funding is usually used when the government and parliament have decided that the recipient should be publicly funded but operate with reasonable independence from the state.In the United Kingdom, most bodies...
. An annual Property Services Grant-in-Aid pays for the upkeep of the royal residences, and an annual Royal Travel Grant-in-Aid pays for travel. The Civil List covers most expenses, including those for staffing, state visits, public engagements, and official entertainment. Its size was fixed by Parliament every 10 years; any money saved was carried forward to the next 10-year period.
From 2013, the Civil List and Grants-in-Aid will be replaced by a single Sovereign Grant, which will be 15% of the surplus generated by the Crown Estate
Crown Estate
In the United Kingdom, the Crown Estate is a property portfolio owned by the Crown. Although still belonging to the monarch and inherent with the accession of the throne, it is no longer the private property of the reigning monarch and cannot be sold by him/her, nor do the revenues from it belong...
.
Estimates of costs and wealth
The total cost of the monarchy is estimated by the group RepublicRepublic (political organisation)
Republic is a British non-partisan republican pressure group advocating the replacement of the United Kingdom's monarchy with a democratically-elected head of state....
to be between £134 and £184 million per year. Other sources estimate it to be around £118 million.
| Concept | Amount (£ millions) |
|---|---|
| Civil List | 15.1 |
| Parliamentary annuities (Prince Philip) | 0.4 |
| Palaces and castles | 15.0 |
| Travel | 6.2 |
| Expenditure met by government departments | 4.9 |
| Security | 100.0 |
| Duchy of Cornwall Duchy of Cornwall The Duchy of Cornwall is one of two royal duchies in England, the other being the Duchy of Lancaster. The eldest son of the reigning British monarch inherits the duchy and title of Duke of Cornwall at the time of his birth, or of his parent's succession to the throne. If the monarch has no son, the... lost revenue |
16.0 |
| Duchy of Lancaster Duchy of Lancaster The Duchy of Lancaster is one of the two royal duchies in England, the other being the Duchy of Cornwall. It is held in trust for the Sovereign, and is used to provide income for the use of the British monarch... lost revenue |
13.0 |
| Costs to councils | 10.0 |
| Unpaid tax | 2.0 |
| Travel and accommodation for Prince Charles | 1.6 |
| Total | 184.2 |
In comparison the Spanish Royal Household costs 8.9M Euro or around £7.4M. According to the British Republican campaign, the Irish Republic Presidency £1.8m and the German Presidency £26m.
Until 1760 the monarch met all official expenses from hereditary revenues, which included the profits of the Crown Estate
Crown Estate
In the United Kingdom, the Crown Estate is a property portfolio owned by the Crown. Although still belonging to the monarch and inherent with the accession of the throne, it is no longer the private property of the reigning monarch and cannot be sold by him/her, nor do the revenues from it belong...
(the royal property portfolio). King George III
George III of the United Kingdom
George III was King of Great Britain and King of Ireland from 25 October 1760 until the union of these two countries on 1 January 1801, after which he was King of the United Kingdom of Great Britain and Ireland until his death...
agreed to surrender the hereditary revenues of the Crown in return for the Civil List, and this arrangement persists. The Crown Estate is one of the largest property owners in the United Kingdom, with holdings of £7.3 billion in 2011. It is held in trust, and cannot be sold or owned by the Sovereign in a private capacity. In modern times, the profits surrendered from the Crown Estate have exceeded the Civil List and Grants-in-Aid. For example, the Crown Estate produced £200 million for the Treasury in the financial year 2007–8, whereas reported parliamentary funding for the monarch was £40 million during the same period.
From 2013, the Civil List and Grants-in-Aid will be replaced by a single Sovereign Grant, which will be 15% of the surplus generated by the Crown Estate
Crown Estate
In the United Kingdom, the Crown Estate is a property portfolio owned by the Crown. Although still belonging to the monarch and inherent with the accession of the throne, it is no longer the private property of the reigning monarch and cannot be sold by him/her, nor do the revenues from it belong...
. The changes were introduced by the Sovereign Grant Act 2011
Sovereign Grant Act 2011
The Sovereign Grant Act 2011 is an Act of the Parliament of the United Kingdom. It is the biggest reform to the finances of the British Royal Family since the inception of the civil list in 1760....
. The annual amount will be calculated on the revenue from two years previously, and the arrangements will be reviewed by 2020.
Forbes magazine estimated the Queen's net worth at around US$450 million in 2010, Official Buckingham Palace statements in 1993 called estimates of £100 million "grossly overstated", and Jock Colville, a former private secretary of the Queen and a director of her bank, Coutts
Coutts
Coutts & Co. is one of the UK's private banking houses, now wholly owned by the Royal Bank of Scotland . RBS acquired Coutts and all of its overseas subsidiaries when it bought NatWest. On 1 January 2008, Coutts' international businesses were renamed RBS Coutts, aligning them more closely with...
, estimated her wealth at £2 million in 1971 (the equivalent of about £ today).
Crown Jewels
Jewels in the Tower of London (including the crown, orb and sceptre) are state-owned rather than private possessions, the Treasury referring to these assets as "vested in the sovereign and cannot be alienated".Keeper of the Privy Purse
The Keeper of the Privy PurseKeeper of the Privy Purse
The Keeper of the Privy Purse and Treasurer to the King/Queen is responsible for the financial management of the Royal Household of the Sovereign of the United Kingdom....
is Head of the Privy Purse and Treasurer’s Office and has overall responsibility for the management of the sovereign’s financial affairs.
Civil list
The Queen receives £7,900,000 a year from public funds to support the exercise of her duties as head of state of the United Kingdom (the Head of State Expenditure).Parliamentary annuities
Parliamentary annuities of £1,254,000 a year are refunded by the Queen from her private funds.Royal palaces
The occupied palaces in the United Kingdom such as Buckingham PalaceBuckingham Palace
Buckingham Palace, in London, is the principal residence and office of the British monarch. Located in the City of Westminster, the palace is a setting for state occasions and royal hospitality...
and Windsor Castle
Windsor Castle
Windsor Castle is a medieval castle and royal residence in Windsor in the English county of Berkshire, notable for its long association with the British royal family and its architecture. The original castle was built after the Norman invasion by William the Conqueror. Since the time of Henry I it...
are held in trust and do not belong to the Sovereign personally.
Duchy of Lancaster
Like the Crown Estate, the land and assets of the Duchy of LancasterDuchy of Lancaster
The Duchy of Lancaster is one of the two royal duchies in England, the other being the Duchy of Cornwall. It is held in trust for the Sovereign, and is used to provide income for the use of the British monarch...
, a property portfolio valued at £383 million in 2011, are held in trust. The revenues of the Duchy form part of the Privy Purse
Privy Purse
The Privy Purse is the British Sovereign's remaining private income, mostly from the Duchy of Lancaster. This amounted to £13.3 million in net income for the year to 31 March 2009. The Duchy is a landed estate of approximately 46,000 acres held in trust for the Sovereign since 1399. It also has...
, and are used for expenses not borne by the Civil List.
Duchy of Cornwall
The Prince of Wales receives revenue from the Duchy of Cornwall, a property portfolio held in trust to meet the expenses of the monarch's eldest son.Private estates
Sandringham HouseSandringham House
Sandringham House is a country house on of land near the village of Sandringham in Norfolk, England. The house is privately owned by the British Royal Family and is located on the royal Sandringham Estate, which lies within the Norfolk Coast Area of Outstanding Natural Beauty.-History and current...
in Norfolk
Norfolk
Norfolk is a low-lying county in the East of England. It has borders with Lincolnshire to the west, Cambridgeshire to the west and southwest and Suffolk to the south. Its northern and eastern boundaries are the North Sea coast and to the north-west the county is bordered by The Wash. The county...
and Balmoral Castle
Balmoral Castle
Balmoral Castle is a large estate house in Royal Deeside, Aberdeenshire, Scotland. It is located near the village of Crathie, west of Ballater and east of Braemar. Balmoral has been one of the residences of the British Royal Family since 1852, when it was purchased by Queen Victoria and her...
in Aberdeenshire
Aberdeenshire
Aberdeenshire is one of the 32 unitary council areas in Scotland and a lieutenancy area.The present day Aberdeenshire council area does not include the City of Aberdeen, now a separate council area, from which its name derives. Together, the modern council area and the city formed historic...
are privately owned by the Queen.
Royal Collection
The Royal CollectionRoyal Collection
The Royal Collection is the art collection of the British Royal Family. It is property of the monarch as sovereign, but is held in trust for her successors and the nation. It contains over 7,000 paintings, 40,000 watercolours and drawings, and about 150,000 old master prints, as well as historical...
, which includes artworks and the Crown Jewels
Crown jewels
Crown jewels are jewels or artifacts of the reigning royal family of their respective country. They belong to monarchs and are passed to the next sovereign to symbolize the right to rule. They may include crowns, sceptres, orbs, swords, rings, and other objects...
, is not owned by the Queen personally and is held in trust
Trust law
In common law legal systems, a trust is a relationship whereby property is held by one party for the benefit of another...
.
Taxation
Members of the Royal Family other than The Queen and The Prince of Wales are subject to tax in the ordinaryway. There is a Memorandum of Understanding on Royal Taxation which records the arrangements for the payment of tax by the Queen and the Prince of Wales. Only a proportion of capital gains arising on assets belonging to the Privy Purse are subject to capital gains tax the Memorandum of Understanding justifies this on the basis that the Privy Purse meets both public and private expenditure. The proportion of gains and losses to be taken into account is:
(A - B)/A
where:
A is the Privy Purse income
B is any excess of Privy Purse expenses over Duchy of Lancaster income.
The Prince of Wales is not required to pay tax on his income from the Duchy of Cornwall
Duchy of Cornwall
The Duchy of Cornwall is one of two royal duchies in England, the other being the Duchy of Lancaster. The eldest son of the reigning British monarch inherits the duchy and title of Duke of Cornwall at the time of his birth, or of his parent's succession to the throne. If the monarch has no son, the...
but in all other respects is subject to tax in the normal way. In 1969 Prince Charles made voluntary tax payments of 50% of profits from the Duchy but this reduced to 25% in 1981 when he married Princess Diana.
The Official Expenditure of the Queen and the Prince of Wales is regarded as tax deductible, the rules on what constitutes Official Expenditure are set in the Memorandum of Understanding. Property passing from monarch to monarch is exempt from Inheritance Tax, as is property passing from the consort of a former monarch to the current monarch.