The Royal Family’s Money

The finances of Britain’s royal family results from a complicated history, one where the monarchs were both private and public persons and where their wealth was of both a public and private nature, as it remains to this day. It is probably because of this that press interest in the royal family is not limited to just their relations, official engagements, and the like; even their money receives a lot of intrigue. Looking more closely, it’s understandable why; theirs is not like any other family’s personal finances.

Wealth

The royal family’s wealth is not so easy to define. There are plenty of assets used by the monarchs that they do not ‘own’ in the common sense of the word. These are assets that are property of the crown in a general sense but which a single monarch does not have full control over, including the ability to sell them. The ‘Crown Estate’ consists of the land holdings of the monarchy, not owned privately by any member of the royal family, but only as an asset held in common among all of them and even the public to a degree.

That said, members of the royal family and even the monarch can and do own private assets in the manner any other person does. Some royal residences are owned personally by the monarch, like Sandringham and Balmoral. While put to official use occasionally, they are private residences like any other and can be sold or bequeathed however their owner wishes. This was not always possible though; prior to the Crown Private Estate Act 1800, the British monarch was barred from owning property in a private capacity.

Besides real estate, monarchs also own various other private assets, from investments in securities to racehorses. Many of these assets are not disclosed, so the exact extent of their private fortunes is subject to wild speculations and unhelpfully wide ranges of possible values. The media may make a lot of these estimates but it’s pointless to put much stock in them; what good is an estimate that ranges from £100 million to £2 billion or more. Such was the range of estimates of Queen Elizabeth II’s wealth in 1993.

Besides ambiguity as to whether crown assets count towards their own wealth, the type of possessions held by the royal family, from one-of-a-kind residences to art, are difficult to value. Queen Elizabeth, The Queen Mother owned an art collection including several famous painters as well as other collectibles ranging from furniture to jewelry and Fabergé eggs. She had added to this collection through her own purchases which appreciated over the span of her long life.

Her collection included a Monet painting, Study of Rocks, which she bought for £2,000 in 1945 but which was worth somewhere around £7 million by the time she died in 2002. While that piece was owned privately, just as with their residences, the monarch’s collection of art also includes pieces that are part of the crown’s property generally and which cannot be sold by a monarch to generate income.

Income

In the medieval period, the monarch’s regular income included the revenues of crown land and various fees known as feudal dues. These were supplemented by customs duties in the 14th century. However, especially after the English Civil War, the monarch could not even conceive of raising new taxes without the consent of Parliament. That said, even after the Civil War, the public finances were still closely associated with that of the monarch and the income of the monarchy went towards paying for various state functions. However, by the 18th century, the crown lands had become too small to generate enough revenues to carry on much in the way of public spending.

Since then, income from the crown estate goes to the government rather than the monarch. This has been the arrangement since the 1760s and in return for giving up this income the monarch receives an income with which they could support themselves and others, the Civil List, a sum which stood at £800,000 per year when George III became king in 1760. In return, the monarch also gave up many responsibilities for funding certain operations of the state which the government would now fund itself.

Together with various grants, the monarch received £3 million from the government each year by 1816. In 1830 though, the Civil List was reduced when more responsibility for certain spending was transferred to the government rather than the monarchy. The Civil List was consolidated with other grants in 2012 to form the ‘Sovereign Grant’, amounting to £86.3 million in 2023/24, though a large part of this is nonrecurring, going towards a refurbishment of Buckingham Palace.

The Civil List is not the only source of income for the monarch and their family. There are other sources that do not involve the government budget. Two other estates produce substantial regular income; the Duchy of Cornwall produces an income for the Prince of Wales and the Duchy of Lancaster for the monarch.

The Duchy of Cornwall produced an income of £23.6 million in 2023/24 and the Duchy of Lancaster an income of £29.6 million that same year. Since 1702, the sale of ducal lands has been prohibited so these holdings have remained intact for the last three centuries. This means that the Duchy of Cornwall remains a holding of 52,449 hectares of land along with other properties. The Duchy of Lancaster meanwhile is made up of over 18,000 hectares of rural land and other assets, from mines to commercial properties.

Taxes

Despite earning large incomes from a large wealth, the reigning monarch and the Prince of Wales are generally exempt from taxes. Tax laws don’t usually call this out specifically, but they have been generally understood not to apply to the monarch, unless the laws specifically say otherwise. That said, Queen Victoria volunteered to pay income tax when one was enacted in 1842 by her Prime Minister, Robert Peel.

After repairs to Windsor Castle, needed following a 1992 fire, were paid with taxpayer money, Queen Elizabeth II and the Prince of Wales both agreed to make voluntary tax payments themselves. The monarch agreed in 1993 to pay taxes on all personal income and all income from the Duchy of Lancaster used for personal purposes. The Prince of Wales likewise agreed to pay income tax on any of the income of the Duchy of Cornwall used for personal purposes.

Under the same agreement, the monarch agreed that recipients of her bequests and gifts would be subject to inheritance tax except for transfers of assets, like palaces, to her direct successor. Private assets, such as royal residences at Sandringham and Balmoral, are also tax exempt when passed onto an immediate successor as monarch. The broad tax exemption for the monarch and Prince of Wales does not extend to other members of the royal family though. Also, Queen Elizabeth II voluntarily paid local taxes on private residences and stamp tax on securities transactions.

The Queen Mother’s Estate

The exemption from taxes between a monarch and their successor also applied to Elizabeth II’s mother. In 2002, when Queen Elizabeth, The Queen Mother died, her estate was estimated to be worth as much as £70 million, though the privacy which the monarchy is afforded means this value was never a certain fact. Most of her estate was left to Queen Elizabeth II and as such was exempt from inheritance tax under the agreement reached in the early 1990s.

A £19 million trust had also been established for some of The Queen Mother’s other descendants back in 1994. Had such a trust not been formed, these assets would have been subject to inheritance tax since they were not gifts to an immediate successor. Further, under tax rules relating trusts in the United Kingdom, these amounts would be free from inheritance tax only if the Queen Mother lived another seven years after the trust was formed, which she did. After her 2002 death, other money was willed to her staff but outside the trust these amounts were subject to the usual tax.

Lesson

The evolution of the relationship between the monarchy and the state has resulted in the gradual separation of the monarch’s and the state’s finances. The monarch no longer is expected to fund public projects, use revenues from estates to pay for wars, or provide much in the way of disaster relief either. The public finances of a constitutional monarchy are not significantly different from the public finances of a republic. Still, some peculiarities remain, at least in Britain; the monarch is not taxed like a normal citizen. This is unfortunate in the opinion of many but there is something to be said for the semi-public status of their wealth. Assets like Balmoral may be technically private but seeing them sold upon a monarch’s death and perhaps redeveloped would seem like the loss of some public asset, however private it may actually be.

More from the Tontine Coffee-House

Read about the personal finances of Winston Churchill and the 2nd Duke of Buckingham and Chandos. Consider subscribing to this blog’s newsletter or checking out book recommendations, which include many of the sources often referenced in my posts.