Finances of the Monarchy

For centuries, the government has provided financial support to the Monarch. Since 2012/13, this has been known as the Sovereign Grant, as provided for under the Sovereign Grant Act 2011. This was introduced to consolidate different sources of financial support (including the long-standing Civil List) while improving accountability of spending on the Monarch’s “official duties”. The Grant includes funding for:

• the maintenance of Royal residences known as the Occupied Royal Palaces, which are used for formal entertaining and ceremonial events;
• Royal travel for official engagements in the UK and overseas undertaken by the King and other members of the Royal Family acting on his behalf;
• employment costs for Royal Household staff who support the work of the King as head of state.

The level of the Grant (£86.3 million a year in 2024/25) is linked to, but not directly derived from, profits from the Crown Estate, a portfolio of land. The Grant is extended at the beginning of a new reign (via Order in Council), reviewed every five years and subject to scrutiny by Parliament and the National Audit Office. Following the most recent review, the Sovereign Grant will be set at 12% of Crown Estate profits. As a result of a significant rise in Crown Estate profits, the Sovereign Grant will increase to £132.1 million in 2025/26, a rise of £45.8 million or 53% in cash terms on the previous year.

In addition to the Sovereign Grant, the King receives income (via the Privy Purse) from the Duchy of Lancaster (a landed estate), while the Prince of Wales receives net profits from the Duchy of Cornwall. The two Duchies are independently audited and subject to various Acts of Parliament. The Chancellor of the Duchy of Lancaster is a Cabinet position with residual duties in that Duchy. There have been occasional calls for revenue from both Duchies to be “surrendered” alongside that from the Crown Estate. Finally, the King derives private income from investments and inherited wealth, which is not made public. Critics have suggested Royal finances are “shrouded in fog”.

There is no legal obligation for the King or Prince of Wales to pay tax. Since 1993, however, the Monarch and her or his heir has voluntarily paid income tax on income from the Duchies and earnings from personal investments but not on the Sovereign Grant. Capital gains and inheritance tax are also paid in certain circumstances. Similarly, local taxation is paid on a voluntary basis. This is set out in a non-statutory Memorandum of Understanding between the Treasury and the Royal Household.

The King owns property “in right of” the Crown or the United Kingdom, for example the Crown Estate, government buildings, the Occupied Royal Palaces and the Royal Collection, but can neither dispose of this freely nor derive direct income from it.

There is a file attached to the landing page of this briefing with more detailed figures.