Does the Royal Family Pay Taxes?

Here’s where the royal family gets their money.

The British royal family has a long and storied history, and their wealth is largely a source of mystery. Many people wonder if the royal family pays any taxes at all, and if so, where their money comes from. The death of Queen Elizabeth II, who ruled for 70 years, has brought about a moment of transition both for the British monarchy and their finances.

What does the royal family receive?

The royal family receives money from government funding, private property they own by virtue of their royal positions, and from their own private wealth. In the U.K., the Sovereign Grant is paid to the royal family by the government as an annual salary. The amount of the Sovereign Grant is based on a percentage of the profits of the Crown Estate, a portfolio of property and land that belongs to the British Monarch.

The royal family is given 15% of the Crown Estate profits from the previous two years, with the government keeping the remainder. Starting in 2017, the Royal Trustees of the Crown Estate agreed to give an additional 10% to help pay for the reservicing of Buckingham Palace. For 2021–2022, it generated a net revenue profit of 312.7 million pounds ($358.25 million). The royal family received 86.3 million pounds ($98.84 million) -- equivalent to 1.29 pounds ($1.48) per person in the U.K.

The royal family has other sources of income coming from the Duchy of Lancaster and Duchy of Cornwall. Since 1399, the title Duke of Lancaster has been held by the reigning monarch, which is now King Charles III. This past year, the queen received 24 million pounds ($27.44 million) in income from the Duchy (territory of a Duke/Duchess) of Lancaster. The Duchy had nearly 653 million pounds ($746.55 million) of net assets under its control at the end of March 2022. With King Charles III becoming king, his son Prince William is now the Duke of Cornwall, inheriting over 1 billion pounds ($1.14 billion) in assets and 23 million pounds ($26.29 million) in annual income.

The royal family also has their own personal wealth. This includes investments, art collections, jewelry, a stamp collection estimated to be worth over 100 million pounds, and money they inherited from family. The royal family does not release information about their private finances, so it is difficult to say exactly how much they are worth and what their income is.

Where does the money come from?

The Crown estate is a vast and varied property portfolio that is owned by the British Monarch, now King Charles III. It includes everything from residential properties to agricultural land, as well as commercial and retail properties. The Crown Estate generates income from various sources, including rent from tenants, dividends from investments, and revenues from its commercial properties. The estate is managed by a board of directors who are appointed by the British Monarch.

The origins of the Crown Estate date back to the Norman Conquest in 1066, when William the Conqueror seized all of the property and land in England. This became known as the Crown lands. Over the centuries, successive monarchs have added to the estate, and it is now worth more than 17 billion pounds ($19.44 billion).

Income from the Duchy of Lancaster and Duchy of Cornwall comes primarily from agricultural, commercial, and residential land. Both Duchies are private estates and are not part of the Crown Estate.

How do the royals spend the money?

The money from the Sovereign Grant pays for the royal families' duties. Last year, they participated in almost 2,300 official engagements across the United Kingdom and overseas. Most of the Sovereign Grant was used for property maintenance. Here is a breakdown of their seven largest expenses:

1. Property maintenance: 63.9 million pounds ($76.19 million)
2. Payroll costs: 23.7 million pounds ($27.14 million)
3. Travel: 4.5 million pounds ($5.15 million)
4. Other staff costs: 3.8 million pounds ($4.35 million)
5. Utilities: 3.2 million pounds ($3.67 million)
6. Digital services (IT/Telcom): 3.2 million pounds ($3.67 million)
7. Housekeeping and hospitality: 1.3 million pounds ($1.49 million)

Does the royal family pay taxes?

According to the royal family's website, "The Queen pays tax."

"In 1992, The Queen volunteered to pay income tax and capital gains tax, and since 1993 her personal income has been taxable as for any other taxpayer. The Queen has always been subject to Value Added Tax and pays local rates on a voluntary basis."

The Duchy of Cornwall's website states, "The Duke has no access to the Duchy's capital value and he pays income tax on the annual revenue, which is used to fund the public, charitable and private activities of The Duke and Duchess of Cornwall, The Duke and Duchess of Cambridge and The Duke and Duchess of Sussex."

King Charles III, while the Duke of Cornwall, voluntarily paid the top rate of income tax -- 45% -- on the Duchy's earnings. The Duchy is not liable for corporation or capital gains tax.

Overall, it appears the royal family pays a significant amount of taxes on their wealth. Despite the fact the Monarch is not liable by law to pay income tax, capital gains tax, or inheritance tax, the royal family has been paying taxes since 1993.