July 14, 2024

How is the British royal family financed?

5 min read
How is the British royal family financed?
How is the British royal family financed?

The British royal family owns properties all over the world United kingdom It employs hundreds of workers, from engineers to chefs, including various agents responsible for the safety of its members.

“The Firm”, as the family’s name began in the reign of George VI, father of Elizabeth II, also regularly organizes lavish receptions for ambassadors and foreign leaders, and some of its members make frequent visits and official engagements throughout the country. And around the world.

With the end of the strict coronavirus control measures, the royal family’s travels have increased. During the 2021-22 fiscal year, travel costs reached US$5 million (about R$26 million), according to data from “Firma”.

only the Travel From Prince William He and his wife Kate crossed the Caribbean earlier this year for about $260,000.

Now King Charles III’s trip to Barbados, where he participated in the festivities that marked the transition to the republic, cost approximately $160,000 US (841,000 RRL).

And maintenance of all the royal palaces costs millions of dollars annually.

On the other hand, the British monarchy generates income for the country, especially in tourism, although it is difficult to estimate the exact amount for this country.

So where does the money come from to fund the royal family?

sovereign support

The British Government annually provides its monarch with a taxpayer-financed payment, the Sovereign Grant (“Sovereign Grant”), which serves to cover the costs of the official duties of the monarchy.

During the 2021-2022 financial year, the Sovereign Grant was set at £86.3 million. Security costs are not included.

However, the renovation of Buckingham Palace brought total spending for the past fiscal year to about $118 million, up 17% from the previous year. The difference was covered by the remaining amounts of the sovereign grant from previous years.

Most of the Sovereign’s grant is used to cover the costs of maintaining the royal palaces and paying the salaries of employees. It is also used to pay for the royal family’s official engagements.

BBC journalist Tom Eddington, chief correspondent for the BBC’s data verification unit, explains that after the death of Queen Elizabeth II, the system remained intact.

Land and real estate

The sovereign grant payment is based on proceeds from Crown Estates, a group of UK land and real estate properties owned by the British monarch valued at approximately US$20 billion.

The income of the Crown Estate goes to the British Treasury, which is responsible for implementing the financial and economic policies of the government.

Hence, the Treasury usually gives the King 15% of the Crown Estate’s profits from the past two years, while the government keeps the rest.

However, it was established in 2017 that the monarchy would get a higher percentage, 25% over 10 years, to pay for the $425 million renovation of Buckingham Palace, the king’s main residence in London.

Within the Crown Estate portfolio are properties such as most of Regent Street, one of London’s most important shopping streets, as well as half of St. James, in central London, including commercial and office space.

There is also an Ascot Racecourse just outside of London, as well as thousands of acres of farmland across the country. The company manages about half of coastal properties in England, Wales and Northern Ireland.

The Crown Estate’s portfolio of real estate and land was not the private property of the Queen, nor did it become the private property of King Charles III, but was the property of the King during his reign. This means that the King may not sell any of the Crown property or make any profit.

Royal Duchies

The Sovereign Grant isn’t the only source of income for the royal family, who also earn money from a royal ducati.

King Charles III inherited the most important thing from the Queen: the Duchy of Lancaster, a private property that generates millions in income and passes from king to king.

Does the second duchy, the Duchy of Cornwall, belong to the Prince of Wales? The title of heir to British monarchs, which Charles bestowed on his son William.

The Duchy of Lancaster’s estates consist of more than 18,000 hectares of land in England and Wales, mostly in the north of these areas. But there is also a large number of residential, commercial and financial properties in central London.

As of March 2022, the Duchy of Lancaster has a value of £652.8 million.

In turn, the Duchy of Cornwall, which was founded by Edward III in 1337 to grant independence to his son and heir to the throne, owns lands primarily located in southwest England. William currently manages these properties.

It is estimated that this duchy covers 0.2% of the total land in the UK.

No duchy was taxed and it was not revealed how the profits from these estates were spent, but the Queen and Charles III used to voluntarily pay taxes on these profits.

More numbers

Also, the royal family has its own assets. The Queen was the absolute owner of Balmoral and Sandringham, two income-generating properties she inherited from her father.

It also owns a large collection of artwork and other valuable possessions that it has inherited from previous kings.

It is difficult to estimate the net worth of the British royal family, but the Sunday Times has included Queen Elizabeth II in its list of the richest people in the United Kingdom, with a net worth of US$430 million (R$2.2 billion). Forbes magazine estimated her fortune at 500 million dollars (2.6 billion Brazilian reals).

It is also difficult to calculate how much the royal family will cost to the taxpayer because the Sovereign Grant is not used to pay for the security of the royal family, which is what the Metropolitan Police usually does.

David McClure, royal family expert and author The real value of the queen (“The Real Value of the Queen”) The government cost of protecting the royal family has been estimated at more than $100 million a year.

However, other organizations, such as The Republic, which defends the Republic, estimate the annual cost of the monarchy, taking into account security costs, at around £345 million. Much larger than the taxpayer-funded sovereign grant.

Gains more than expenses?

But other organizations argue that the monarchy brings more money into the British economy than it costs, thanks to activities such as tourism and entertainment that fuel interest in the royal family, such as soap operas. the crown And the Victoria.

Each year, tens of millions of international tourists visit the United Kingdom and many of the historical monuments associated with the British monarchy.

“When it comes to how the monarchy contributes to the British economy, it is very difficult to measure and there are many conflicting opinions,” says the BBC’s Tom Eddington.

Consulting firm Brand Finance estimated in 2017 that the British royal family generated more than US$2 billion (R$10 billion) for the British economy that year.

“However, some people treat this number with skepticism, arguing that the UK would continue to attract millions of tourists even if it did not have a monarchy,” says Eddington.

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