Friday was Royal Finance Day in England when Buckingham Palace released its annual Sovereign Grants Report giving a chapter and verse on how $ 105 million of public money was spent to fund the British monarchy. The report accounts for everything from the price of food and drink at state banquets to the cost of train travel and royal golf excursions.
Yet no details were included in the fanfare announcement about the Queen’s private funds, which sometimes supplement the public grant. In Windsor’s upside-down world of wealth, the line between public and private assets is often blurred – and most tangled is the so-called “private domain” of the Queen.
the Duchy of Lancaster is as slippery as some of the salmon going up the river on one of its country grounds. Like a shape-shifting creature, it can switch between being a private domain one moment and a public entity the next. Sometimes it acts like a family trust, sometimes like a business enterprise. UK MPs who have tried to scrutinize its financial affairs have scratched their heads at its hazy features, which provide AAA protection. It is archaic, obscure, and because it cannot be pinned down, often anonymous and therefore, some complain, it falls under the radar of rigorous parliamentary scrutiny.
How much is it really worth
Founded by Henry IV in 1399 to provide a private nest egg in the event the King is deposed, the Duchy today comprises 45,700 acres of rural land, mostly in the north of England, as well as prime office space on London’s Strand (including hotel grounds Savoy London) whose rental income provides private income to the Queen.
This year, profits hit a record $ 30 million. The Queen uses most of the money to pay her overhead costs –including the expensive Balmoral Estate and his horse racing business in Sandringham– but part of the money (maybe up to several million dollars) is intended to fund half a dozen close family members (Princess Anne, Prince Edward, The Duke of Kent, etc. ) who are “members of the royal family” but who do not receive public funds.
The big question frequently asked about the duchy is whether it is really private or not. This is important because if it is entirely private then like any other personal property it should escape the scrutiny of Parliament. But if it is fully public, then as state property it should be exempt from any taxes enacted by Parliament. Of course, the monarchy would benefit from the best of both worlds.
The palace maintains that this is a “private domain” and points out that it is the personal property of the reigning monarch since the end of the 14th century and that it is held separately from all other possessions in the Crowned. But combing through the archives for my new book on the queen’s wealthI have discovered that the Duchy is much less private than many would like us to believe and much more vital to the monarch’s finances than previously thought.
The history of the duchy
Over the centuries, its original private status, established by two charters in 1399 and 1485, has been eroded by a series of public assaults. The most significant came after the execution of Charles I in 1649 when, if the duchy had indeed been private, it should have automatically passed to his son Charles II. Instead, it was taken over by the Republican regime of Oliver Cromwell, with large swathes of land sold to pay off Civil War debts.
Later, after the restoration of the monarchy and the restitution of most of the land, the status of the duchy took another blow in 1688 when the deposed James II was not allowed to retain his supposedly private property. As I discovered in the estate’s official, privately published history, the key principle that “the Duchy follows the Crown” – that is, monarchs only own the property if they are. actually on the throne – had now been “established” and would soon be. to be set in stone.
Under George III, the estate enjoyed rare success in 1760 when it was inexplicably excluded from the wholesale surrender of hereditary Crown estates to Parliament in exchange for a fixed public subsidy from the Civil List. The only possible reason for this was that his annual profits were so paltry at the time – a few hundred dollars – that he slipped into the net.
But when profits were multiplied by a factor of twelve under Queen Victoria, Parliament repeatedly attempted to have them transferred to the state, an aggression only mitigated by a new law that gave MPs the power to examine its annual accounts.
In 1936, Clement Attlee, former Chancellor of the Duchy and future Prime Minister, took an important step by tabling an amendment to a parliamentary bill aimed at making the revenues of the Duchies of Lancaster and Cornwall cede to the public treasury and arguing that they “Can in no case be considered as a private domain. Then in 1972 Labor MP Willy Hamilton actually introduced a private member’s bill to nationalize the two duchies, and although it was not passed, as many as 104 MPs voted for it. .
Between 1970 and 1972, the private status of the Duchy of Lancaster was significantly undermined when more than $ 150,000 of its income was transferred to the public treasury as an emergency measure to fill the civil list deficit caused by the recent inflation. Indeed, a recently uncovered 1989 Treasury memo confirmed that such cross-funding was not uncommon: “a portion of the income of the Duchy of Lancaster may have been absorbed to cover official and semi-official expenses.” According to MP Dame Margaret Hodge, former chair of Parliament’s financial oversight committee, “to claim that this is private is a bit of a misnomer.” Denying its public side smacks of “deliberate ambiguity.”
An untouchable domain
The vital importance of the Duchy to the Queen’s finances is shown by the way whenever there is a major reform of royal funding – as happened upon its accession in 1952 and more recently in 2012 with the replacement of the civil list by the sovereign grant – his ancestral domain still escapes unscathed. As a newly found Treasury note revealingly put it, “one of the things the palace insisted on was that there shouldn’t be any cession of the Duchy’s income. In fact, the estate appears to be as well fortified as the security around Buckingham Palace.
Today, the Duchy also benefits from two key tax breaks that are different from the way it does business. Although it operates as a real estate company, it does not pay corporate tax or capital gains tax. The supposed reason for this immunity is that the Queen’s estate is like Crown property and the Crown cannot tax itself. But if it aspires to become Crown (i.e. state) property, that makes it public, not private – a classic example of how its status can be shifted into most advantageous category.
Thanks to these tax privileges, to skilful management and to a reconfiguration of the real estate portfolio into more lucrative urban land, the profits of the Duchy multiplied under the reign of the queen. Profits are now $ 21 million higher in real terms than in 1952, when she came to the throne, according to a parliamentary backgrounder. In fact, since the millennium, profits have almost quadrupled.
Thanks to this tantalizing flow of funds, the shape-changing duchy has morphed into the Queen’s Cash Cow – or to give it another shape, he is now the source of her wealth.
Adapted by David McClure from his new book, The Queen’s True Worth (Lume Books; 2020).
This content is created and maintained by a third party, and imported to this page to help users provide their email addresses. You may be able to find more information about this and similar content on piano.io