Secrets of the Royal Purse: How Queen’s income stacks up


Writing in the 19th Century, Walter Bagehot, author of The English Constitution, observed of the Monarchy: ‘Its mystery is its life. We must not let in daylight upon magic.’

Some 155 years on, the curtain has been lifted on much of what the Royal Family does. The age of TV, social media, video and streaming means that the Queen and her family’s affairs, divorces, splits and allegations of sexual disgrace in the case of the Duke of York have become the greatest soap opera on the planet. 

Yet there is much about ‘the Firm’ that even the lavish Netflix series The Crown has failed to penetrate, particularly its finances. 

Each year Buckingham Palace solemnly releases the annual report of the ‘Sovereign Grant’, including an audit signed by the Comptroller and Auditor General. 

This sets out in stringent detail how much official income the Queen and the eight ‘active’ members of the Royal Family received and how it was spent. Yet it leaves much about the personal wealth and resources of the Royal Family shrouded in Bagehot’s mystery. 

The basic facts are that in the financial year 2020-21 (the last for which there are published accounts) the cost of the Sovereign Grant, paid for from the income of the Crown Estate, was £85.9million. 

The Queen received an additional £9.4million of income from rentals and use of Palace-controlled facilities for functions. 

Expenditure was £87.5million (up from £69.4million the previous year) largely as a result of higher maintenance costs as a major ten-year refurbishment and modernisation of Buckingham Palace gets under way. 

The annual report has heaps of detail on staffing levels, salaries, repairs to ‘Buck House’ and Royal travel. It is infinitely more informative than what was available when I first started writing about the subject in the 1970s.

In those days it required a trawl through the accounts of the Department of the Environment just to find out how much was spent on keeping the ancient plumbing at Buck House in working order. 

There is much more transparency now, but no one should be gulled into thinking the Sovereign Grant is anything like the whole story. 

The Queen has another pot of income from the Duchy of Lancaster that flows into what is called the ‘Privy Purse’, used to cover other unspecified ‘official expenditure’. 

The surplus in 2020-21 amounted to £22.3million – down a little from the year before. But the capital value of the estate of land and properties across five counties jumped 7 per cent to £577.3million. As for the Prince of Wales, the 2020-21 accounts for his Duchy of Cornwall estate show it generated £37million of revenue in 2021 and a surplus of £21million. 

The capital value of £1,073million makes Charles custodian of more than £1billion of assets. 

The heir to the Throne, we are assured, has no personal access to the capital value of the estate but is required to pay income tax on the surplus. Amid all the data provided, including a detailed account of a remarkable 76 per cent reduction in carbon dioxide emissions, it is not clear how much cash, if any, was gobbled up by Revenue & Customs. Accounts for the year to March 31, 2022, are expected to be released later this month.   

Former Chancellor of the Exchequer George Osborne did the Queen a huge favour in 2011 when he effectively moved the annual pay of the Royal Family, previously known as the Civil List, off the parliamentary agenda. Before then it required regular scrutiny by the Commons and was an easy target for a handful of Left-wing MPs only too delighted to criticise alleged extravagance and grandeur. 

Under the Osborne arrangements the core Sovereign Grant is calculated as a percentage of the soaring surpluses of the Crown Estate. 

These include those from one of London’s most famous shopping venues, Regent Street, as well as the foreshore and UK coastal waters. In recent years, as demand for offshore wind farms has boomed, the income of the Crown Estate has also climbed. This has allowed the Royal Family to build up additional reserves currently being used for refurbishment of Buckingham Palace.

Still shrouded in secrecy is the Queen’s personal wealth. Forbes magazine, mixing the ‘public’ and ‘private’ assets of the Royal finances together recently estimated it at £22billion, almost certainly a wild exaggeration. 

The Queen’s private riches comprise palaces owned and maintained by the family, including the Sandringham Estate and Balmoral, the Royal stamp collection, the family art, furniture, vintage cars and other collections. The shares held by the Monarch were estimated as being worth as much as £450million in the 1990s or £945million today adjusted for inflation, rather than share price changes.

Ownership is difficult to trace and shareholdings, historically disguised, were held in Bank of England nominee accounts managed by the blue blooded City firms of Barings and Cazenove. 

Since 1993-94 the Queen and her family have paid income tax on personal earnings. But she enjoys one huge tax exception to her subjects. The Sovereign is exempted from paying inheritance tax, which means family wealth – land, shares and anything else – can be passed to her direct heir Prince Charles tax-free. It is a fantastically valuable privilege and arguably means the land and other riches of the royals remain intact as they cascade down the generations. 

As the Queen marks her Platinum Jubilee one suspects that, in spite of the enormous expense of heating her palaces and homes, the cost-ofliving crisis will not be troubling her directly. But one also suspects her personal commitment to frugality, Tupperware pots for breakfast cereal and one-bar electric fires, means thermostats will nonetheless be set lower.

Alex Brummer is City Editor of the Daily Mail. 

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