When Queen Elizabeth II died aged 96 at her residence in Balmoral last week, her son Charles became the new monarch. King Charles III, as he is now known, immediately took the throne and will also inherit his mother’s considerable wealth alongside assets belonging to the crown.
It has prompted questions over the royals' fortune which includes billions of pounds worth of land, marine areas, buildings, property investments and art collections. It has also led to renewed debate on how much people in Wales benefit from the Crown’s wealth, and how this could change under Charles, who has already promised a slimmed-down monarchy.
But the question over where that money comes from is more complicated than Queen Elizabeth II’s personal fortune. It includes major property portfolios governed by ancient rules and huge wealth which is often exempt from UK tax laws. Here is how the royals make and maintain their fortune and the implications their vast wealth have for people in Wales.
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How did the Queen make her money?
The personal finances of the reigning monarch, like many aspects of royal family life, are traditionally kept under lock and key with little information publicly available. Forbes has reported the Queen’s personal net worth at around £430m, while The Times pegged it at slightly lower, around £370m.
But that personal fortune is only part of the monarchy's overall wealth, which comes from three main sources; the Crown Estate, the Duchy of Lancaster and personal wealth derived from other areas. In order to explain the vast wealth Charles will inherit as king, it is helpful to explain each of these in detail.
What is the Crown Estate?
Much of the royals' money comes from what is known as the Crown Estate, a collection of marine and land assets and holdings belonging to the British monarch as head of state, rather than as a private individual. The estate dates its foundation back to 1066 when King William I claimed the ownership of all land "in right of the Crown". Since then, there is always a presumption land belongs to The Crown unless it can be proved that the land belongs to someone else.
Since 1760, the income from the estate has been surrendered to the government by the monarch. The income from this is overseen by a semi-independent public body headed by the Crown Estate Commissioners, whose job it is to invest in and manage the estate's holdings. The UK government in turn gives 25% of the Crown Estate’s profit back to the royals under what is known as the ‘Sovereign Grant’. The money is used to pay for royal engagements such as receptions, school visits, garden parties and trips abroad.
The sums of money the royal family receives from the Crown Estate are considerable. According to the 2021/22 report the total Sovereign Grant including the dedicated amount for ‘re-servicing’ Buckingham Palace - a ten-year programme to renovate the palace costing the British taxpayer £369 million which began in 2016 - amounted to £86.3m. This was equivalent to £1.29 per person in the UK. This included a core grant of £51.8m which funds official travel, property maintenance and the operating costs of the Queen’s household, and an additional dedicated amount for reservicing of £34.5m. The core grant equates to 77p per person in the UK.
If it seems like a lot of money, it might seem less surprising given the eye-watering amounts spent by the royals. For example, according to the 2021/22 report a royal train journey by the Queen to attend a G7 leaders' reception in Cornwall cost £31,796. The Duke and Duchess of Cambridge's tour of the Caribbean in March cost a whopping £226,383.
What does the Crown Estate own?
The Crown Estate employs around 430 people and in June 2022 the value of its portfolio increased by 8.3% to £15.6 billion. The portfolio owned by the Estate is massive, ranging from properties in central London, 7,920 square kilometres of agricultural land and forest and more than half of the UK's foreshore. It also includes at least nine former and current royal residences and the royal collection which includes the Crown Jewels and works by Rembrandt, Vermeer, Caravaggio and Leonardo Da Vinci. This collection is estimated to be worth billions of pounds alone.
In Wales the Estate's assets include the seabed out to 12 nautical miles, around 65% of the Welsh foreshore and riverbed, and a number of ports and marinas. It also includes notable historic buildings like Tintern Abbey. You can read more about all the land and buildings in Wales owned by the royals here.
This is where it gets interesting for Wales. The considerable wealth generated by the Crown Estate has led to fierce debate about the impact on climate change and how the money could be used in Wales. The valuation of the Crown Estate’s marine portfolio in Wales increased significantly in 2021, up from £49.2 million in 2020 £549.1 million. Wales’s total portfolio of assets is currently valued at £603 million, meaning it has major value in terms of the Crown Estate.
This gives the Estate huge power over what happens both on and offshore in Wales. The Estate is responsible for authorising activities such as oil and gas pipelines, marine aggregate extraction, fish farming, and telecommunications and power cables. It also holds the rights to the resources on the continental shelf, such as natural resources and offshore energy (but not fossil fuels.)
In 2016 control of the Crown Estate's assets in Scotland - about £272 million - were transferred over to the Scottish Government including the rights to develop marine energy projects in the country. A new public body, called Crown Estate Scotland (CES), now oversees seabed areas hosting offshore wind, wave and tidal projects and some continental shelf activities.
This is not the case in Wales, where powers over the management of Estate are still held in Westminster and the revenues go directly to the UK government’s Treasury. The considerable value of the Crown Estate Wales’ renewable assets led to a petition earlier this year calling for control of these funds to be transferred to the Senedd garnering over 11,000 signatures. The petition said this would allow Wales to build and develop its own renewable energy industry, rather than relying on the proportion of money it receives from the UK government each year. For example, if a company wants to build an offshore wind farm on Crown Estate-owned marine areas in Wales, the money they pay for that goes directly to the UK government, rather than the Welsh Government who would then have the power over what to do with it.
After the Crown Estate announced plans to generate 4GW of electricity through floating wind farms off the coast of Wales in July, Plaid Cymru said: “Instead of people of Wales being the ones who benefit from the leasing of our seabed, all the profits will disappear into UK Treasury, with a large chunk going to the royal family.
“Put simply, the resources of Wales should be governed by the government of Wales, for the people of Wales. Devolving the Crown Estates’ Welsh territorial assets would allow us to align them with Welsh decision-making and priorities and provide us with the means to use our resources to invest in our green future.” With Charles heralding a new era in royal history, debate over the Crown Estate and how it could better serve the people of Wales is unlikely to go away.
The two duchies
Separate to the Crown Estate are the Duchies of Lancaster and Cornwall, two private estate portfolios owned by the royal family. Unlike the Crown Estate, which would cease to belong to the Windsor family if the UK became a republic, the two duchies are the private property of the family.
The smaller of the two royal duchies, the Duchy of Lancaster owns approximately 46,500 acres (188 km2) of land and properties including Lancaster Castle and traditionally belongs to the reigning monarch. As of the financial year ending March 31, 2022, the estate was valued at £652.8 million. The net income of the duchy - around £24 million in the year to March 2022 - is paid to the reigning monarch as Duke of Lancaster, meaning that King Charles III will inherit the duchy now that the Queen has died.
The other - much larger - duchy is the Duchy of Cornwall, a 685-year-old private estate established in 1337 by Edward III which owns 0.2% of all UK land. This has an estimated net income of £21 million and will be inherited by Charles’ son William, who became Duke of Cornwall and Duke of Rothesay on the day his father took the throne on September 8.
Where else did the Queen make her money?
As well as the Sovereign Grant and the Duchy of Lancaster, the Queen also had personal wealth derived from assets including properties such as Buckingham Palace, Sandringham in Norfolk and Balmoral Castle in Aberdeenshire. There is also her stable of over 100 racehorses which were once reported to have earned her over £7m in income and other personal items including jewellery, cars and artworks such as a Monet painting worth around £15m.
This private fortune has also been handed down to King Charles III and will be added to his own personal fortune built up during his time as Prince of Wales, which included ventures set up to protect the environment and foster organic farming. Through his charitable foundation (which William also inherits now), Charles owned the largest organic food brand in the UK and a nature retreat and crafts centre in Transylvania that each operate as bed and breakfasts. Charles also earned over £20m a year from the Duchy of Cornwall which has now passed into William's possession.
Does Charles get all this money and does he pay tax?
Under exemption laws Charles will not pay tax on most of the assets he inherits through taking the throne. Under a 1993 clause introduced by then prime minister John Major, any inheritance passed “sovereign to sovereign” avoids the 40% tax normally applied to assets valued at more than £325,000. This only applies to whoever inherits the throne - not to any other inheritance between royals, which is subject to tax laws.
Charles will therefore not pay tax on any inheritance tax on the duchy estate or the rest of his mother's wealth. He is not legally liable to pay income tax either, but in 1993 the Queen began paying income tax on a voluntary basis, and Charles is widely expected to do the same.
The Queen can specify that properties be given to certain members of the royal family. However, her will has not been made public and will be sealed for 90 years. It is therefore not clear exactly which of her personal properties will go to Charles, but both Balmoral and Sandringham were passed down to the queen by her father King George VI and we will find out in due course which ones have been given to the new king. Charles has already reaffirmed his decision to “continue the tradition of surrendering the hereditary revenues” from the Crown Estate in return for the Sovereign Grant.
How does the monarchy protect its wealth?
The royal family has traditionally been able to keep exact details of its wealth hidden in several ways. The family is not a public authority and is therefore exempt from Freedom of Information requests, though this does not apply to communications with members of the royal family held by public authorities.
While it does provide details of how money is spent as part of its Crown Estate annual report, how money is spent from the Duchy of Lancaster or the Duchy of Cornwall is not made public. It has led some to question the accountability of the royals' wealth and how much it costs the taxpayer. With inflation rising to a 40-year high and energy bills this winter expected to be double what they were last year, some have suggested that increased scrutiny of royal finances is needed.
This has been countered by pro-monarchists who cite the positive impact on tourism generated by the monarchy. In the fiscal year 2019/20, the royal estate’s income from ticket admissions in the UK rose over the previous year to £49.9m. But with so much money going to the UK government and back into the hands of the royals, and the cash spent on renovations, maintenance, royal duties and trips, King Charles III will likely be under pressure to make good on his promise of a slimmed-down monarchy during a cost-of-living crisis.
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