Following the sad passing of Her Majesty Queen Elizabeth II, we have seen the process of state mourning and Royal accession run parallel. The team here at Panthera Estate Planning wondered about the estate planning provisions required in terms of who inherits, and indeed, what can be inherited, in terms of Royal assets.
The Queen’s will
Her late Majesty’s will relates to her own personal assets, estimated to be £370m in 2022, according to the Sunday Times Rich List. However, unlike most wills, the late Queen’s will won’t become a public document for at least 90 years.
Since 1910, all Royal wills have been sealed by the High Court Family Division and kept in a safe under the responsibility of the president of the court, currently Judge Andrew McFarlane. In 2021, in 2021, he described the reason for sealing wills as follows:
“The degree of publicity that publication would be likely to attract would be very extensive and wholly contrary to the aim of maintaining the dignity of the sovereign.”
The private finances and estates of the Sovereign, i.e. their private income, are known as the Privy Purse. The late Queen volunteered to pay income tax in 1992, and so her income, mainly from the Duchy of Lancaster, has been taxable since 1993. She also voluntarily paid local rates.
Official duties and income
Since 2012, the Sovereign Grant has entirely funded the Monarch’s Official Duties as Head of State, including travel, maintenance of Royal residencies, and salaries for employees of the Royal Household. This includes almost 3,000 official engagements carried out the Royal family around the United Kingdom and overseas each year.
As the Royal.uk website explains:
“Funding for the Sovereign Grant comes from a percentage of the profits of the Crown Estate revenue (initially set at 15%). …. The Royal Household (is) subject to the same audit scrutiny as other government expenditure, via the National Audit Office and the Public Accounts Committee.”
Who inherits the Crown Estate?
Nobody can inherit the Crown estate as it is not the property of the Monarch, and the Sovereign receives no profit from it. The Crown Estate is managed by a Board and profits are paid to the Treasury “for the benefit of all UK taxpayers”. The Crown Estate has been valued at over £7.3billion, and over the past 10 years has generated more than £3billion for the “public purse", including £312.7m in the year 2021/22.
According to their website, the Crown Estate includes:
“London’s best places to work, shop and experience, regional retail and leisure destinations, and a substantial rural portfolio. We manage the seabed and half the foreshore around England, Wales and Northern Ireland, and play a fundamental role in the sustainable development of this national asset, including the UK’s world-leading offshore wind sector.”
The Duchy of Cornwall
The Duchy of Cornwall is a portfolio of land, property and assets. According to the Duchy website:
“The Duchy of Cornwall is a private estate established by Edward III in 1337 to provide independence to his son and heir, Prince Edward. A charter ruled that each future Duke of Cornwall would be the eldest surviving son of the Monarch and heir to the throne. … The Duchy’s estate (covers) 52,449 hectares of land across 20 counties, mostly in the South West of England. It comprises arable and livestock farms, residential and commercial properties, as well as forests, rivers, quarries, and coastline.”
Duchy of Lancaster
The Duchy of Lancaster portfolio of land, property and assets is held in trust for the Sovereign. According to Wikipedia:
“The Duchy is a landed estate of approximately 46,000 acres (200 square kilometres) held in trust for the Sovereign since 1399. It also has 190 miles (306 kilometres) of foreshore. …. The Sovereign is not entitled to the Duchy’s capital, but the net revenues of the Duchy are the property of the Sovereign in right of the Duchy of Lancaster. While the income is private, the King uses the larger part of it to meet official expenses incurred by other members of the British royal family.”
Gifts and presents
Members of the Royal family are given thousands of gifts each year, from flowers to mementoes of state visits. According to MyLondon:
“The Royal Family’s Gifts Policy 2003 includes a rule that members of the family cannot accept any gifts which place them under obligation from the donor. This means they cannot take a gift if they will be expected to do something in return.”
Otherwise, it is the Monarch who decides who can keep each gift. All gifts are recorded - here’s the 2019 list as published on the royal.uk website.
Treasures and art
The Monarch is proprietor in trust for the Royal collections which include:
- 7,600 paintings (more than three times the number housed in the National Gallery)
- 2,000 miniatures (the world’s largest holding)
- Over 500,000 prints and drawings
- A collection of photography
- Collections of furniture, ceramics, clocks, arms and armour
- Archives, and books
- The Crown Jewels. (10)
Again, the Royal collection was not the personal property of the late Queen. It is held in trust by the Monarch for their successors and the nation. The Monarch was aided in this task by the Surveyor of the Queen’s Pictures. (Pub quiz moment here: until 1972 the post was held by Anthony Blunt, later revealed as a Soviet Union spy.)
Accumulated a high net worth estate?
Ensuring bloodline succession according to your wishes, and in a tax-efficient manner, involves careful consideration and advance planning. Contact us for a no obligation consultation to discuss your situation and requirements.