From the BBC:
“Royal finances: Where does the King get his money?”
(The King and his heirs Prince William and Prince George
pictured in Buckingham Palace on the day of the Coronation)
The government has confirmed how much money it gave to the
Royal Family in 2022-23. The taxpayer-funded settlement, known as the Sovereign
Grant, is paid every year - but is not the King's only source of income.
How much money does the Royal Family get from the taxpayer? For 2022-2023, the Sovereign Grant
was worth £86.3m, the same as in 2021-2022. But repairs to Buckingham
Palace - which is undergoing a 10-year £369m refurbishment plan - and the costs
associated with King Charles succeeding Queen Elizabeth, plus
higher-than-expected inflation, took total spending for the period to £107.5m.
That represents a 5% increase on the £102.4m spent the previous year. The
shortfall, with spending greater than the Sovereign Grant, meant drawing on
£20.7m from reserves.
What is the Sovereign Grant spent on? The King and other working members of
the Royal Family can only use the money to pay for expenses related to their
official duties. The vast majority is spent on the upkeep of properties
and staff costs. Members of the Royal Family carried out 2,700
engagements across the UK and abroad during the year. More than 95,000
guests attended 330 events at royal residences, including receptions, award
investitures and garden parties. Buckingham Palace received more than 183,000
items of correspondence.
How is the Sovereign Grant calculated?
The amount is based on a proportion of the profits of the
Crown Estate, a property business owned by the monarch but run independently.
It had assets worth £16.5bn in 2022. The Crown Estate includes almost
£8bn of properties in London, including Regent Street, as well as nearly half
the land along the coast of England, Wales and Northern Ireland. It is
not the King's private property - it merely belongs to the monarch for the
duration of their reign. The King cannot sell its assets or keep any profits
for himself. Normally, the amount for the monarchy is calculated as 15%
of the Crown Estate profits from the previous two years. The profits go to the
Treasury, but then 15% of that amount is used for the Sovereign Grant. However,
in 2017 it was agreed that this would increase to 25% for 10 years to help pay
for the Buckingham Palace repairs. Under the Sovereign Grant Act 2011,
if the Crown Estate's profits fall, the monarch still receives the same amount
as the previous year, with the government making up the difference. In
future, that percentage given to the Royals is likely to reduce, and a review
is currently under way with a decision expected in the next few months. This
follows an expected increase in profits from six new offshore wind farms on the
Crown Estate, worth £1bn. King Charles has already indicated that he would want
the extra money to be used for the "wider public good".
How old is the Crown Estate? The Crown Estate was originally the name
for the lands owned by the monarch - it dates from the time of the Norman
Conquest. In 1760, King George III reached an agreement with the
government to surrender his income from the Crown Estate. In return, it
was agreed that the King (and his successors) would receive a fixed annual
payment - known as the Civil List. The Sovereign Grant replaced the
Civil List in 2012.
How else does the Royal Family receive money? The King also receives money from a
private estate called the Duchy of Lancaster, which is passed down from monarch
to monarch. It covers more than 18,000 hectares of land in areas such as
Lancashire and Yorkshire, as well as property in central London. Worth £654m,
it generates about £20m a year in profits. Whoever holds the title of
Duke of Cornwall (currently Prince William) benefits from the Duchy of Cornwall.
It mainly covers land in south-west England. Worth £1bn, it generated a net
surplus of £24m in 2022-23. The King and Prince William receive the
profits from the duchies personally, and can spend them as they wish. However,
they are not entitled to any proceeds from the sale of any estate assets, which
must be reinvested. The monarch also owns the royal palaces (which are
not part of the Crown Estate) and part of the Royal Collection of art, but
these do not generate income. Some palaces are looked after and funded
by the Royal Family itself. Others - such as the Tower of London - are managed
by Historic Royal Palaces, an independent charity. The Royal Collection
is also run by a charity, the Royal Collection Trust, which reinvests income
received from ticket sales and retail outlets. The Queen also earned
income through properties such as Sandringham and Balmoral, which she owned
personally. In addition, some Royal Family members have private art,
jewellery and stamp collections which they can sell or use to generate income
as they wish.
Do members of the Royal Family pay tax? In 1992, The Queen volunteered to pay
income tax and capital gains tax on her personal income, and the King does the
same. The two duchies are exempt from corporation tax, but the King and
the Prince of Wales voluntarily pay income tax on the revenue they generate.
They do not pay capital gains tax because they do not benefit personally
from any increase in the duchies' assets. Members of the Royal Family
pay tax on any income generated from privately-owned assets. King
Charles does not have to pay inheritance tax on the money he received when
Queen Elizabeth died, under the "sovereign to sovereign" exemption
agreed in 1993 by then Prime Minister John Major.
What about security and other costs? Some argue that the true cost of the
Royal Family is much greater than the size of the Sovereign Grant. It
does not cover their security arrangements, which are usually picked up by the
Metropolitan Police, although the cost is not disclosed. In May, the
Treasury confirmed that Queen Elizabeth II's funeral had cost the government an
estimated £162m. It is not yet known what the King's Coronation cost,
although unofficial estimates suggest it could be between £50m and £100m. Republic,
an organisation which campaigns for an elected head of state, previously
estimated that the total yearly cost of the monarchy - once security is
factored in - is about £345m.
How much money does the Royal Family generate for the UK
economy? It is
impossible to provide a concrete figure for the scale of the Royal Family's
contribution to the UK economy. Estimates vary considerably. The
consultancy Brand Finance argues the cost of Royal Family is eclipsed by what
it contributes by boosting tourism and trade. However, Republic
questions the validity of its sums, and argues that much of the Royal Family's
assets are in fact the property of the state, and have no value because they
cannot be sold.
^ Yikes! That’s a lot of money. ^
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.