Business Insider Edition

Watch: Here's where the royal family gets their money

Caroline Praderio , Business Insider US
 Aug 10, 2019, 03:33 PM

  • It costs about R5.4 billion a year to run the British monarchy.
  • Some of that money comes from the queen's private investments.
  • But a substantial chunk — about R714 million last year — comes from the British government.

Royal families don't come cheap: The Telegraph reports that it costs about R5.4 billion to run the British monarchy each year. So how do Queen Elizabeth II and her brood acquire such a sum?

Their funding actually comes from a few different sources, both public and private. Here's how it breaks down. 

Every year, the Queen gets a chunk of cash called the Sovereign Grant.

It comes from the treasury and it's funded by taxpayers, according to the BBC.

The basic agreement is that the Queen gets the grant in exchange for surrendering all profits from the Crown Estate— the Royal family's massive portfolio of properties — to the government. Every year, the Queen is given an amount of money equivalent to 15% of the Crown Estate's profits from two years ago.

For example: In 2013, the Crown Estate generated a profit of R4.8 billion. That means, in 2015, the Queen's Sovereign Grant was 15% of that total — that's R723 million.

The Sovereign Grant pays for the family's travel, palace upkeep and utilities, and royal employee payroll, according to official royal family financial reports.

But the Telegraph notes that at the grant doesn't cover costs of security and royal ceremonies — that money comes from a few other places.

The Queen's private income is called the Privy Purse. That money comes from the Duchy of Lancaster— a portfolio of land and other assets that's been in the royal family for hundreds of years. It includes 18,433 hectares of land and is made up of residential, commercial, and agricultural properties.

From 2015 to 2016, it generated R322 million. According to the royal family website, this sum helps with costs not covered by the Sovereign Grant — namely, it's used to pay "expenses incurred by other members of the royal family."

The Queen also has a personal fortune estimated to be about R6.1 billion. She outright owns Balmoral and Sandringham Estates, which she inherited from her father, and also has a valuable artwork collection, CNN reports.

It's nothing to sneeze at, but the Queen is by no means the richest person in Britain. For the past two years, she's failed to make the Sunday Times's list of the top 300 wealthiest Brits.

Prince Charles has a major income stream, too. The Duchy of Cornwall— yet another suite of properties owned by the royal family — covers the expenses of the Prince of Wales (that's the Queen's oldest son, Charles) and his heirs. That means Harry, William and Kate, and George and Charlotte are all covered by the Duchy of Cornwall, too.

The total income of the Duchy for the 2015-2016 fiscal year was R606 million. No wonder Prince George has such a fluffy bathrobe.

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