‘Quite improper’: ‘Murky’ royal truth Meghan and Harry accidentally revealed

$13,587,949.61 that is how much money the Queen has reportedly made out of horse racing over the past 30 years. For most people, that would be an unimaginable fortune, but for Her Majesty, it’s barely a drop in the ocean.
The royal family’s finances have long been something of an enigma, partially hidden from public view and shrouded in secrecy, but this week Harry and Meghan, the Duke and Duchess of Sussex’s shock decision to quit as frontline members of the royal family has sparked renewed focus on the Windsor family finances. Namely, quite how much money do they actually have? And where does it all come from?
The answers to those questions are far from simple to answer. The Queen, and her family’s financial arrangements, are highly complex, often murky, and some aspects have never been made public.
Harry and Meghan, writing on their recently launched website, revealed that 5 per cent of their income comes from the Sovereign Grant while the remaining 95 per cent comes from Prince Charles. Having made the historic decision to step down as “senior” working members of the royal family, they have announced they will no longer be accepting the Sovereign Grant, while the Prince of Wales’ willingness to dole out a very generous annual allowance to the couple is far from certain.
Getting the full measure of the royal family’s finances is nearly impossible, largely because they face different rules.
“There’s a residual deference in the royal family, which has meant that they haven’t always faced the awkward questions, which as they ought to have done,” former MP and Privy Council member Norman Baker told news.com.au in an interview conducted last year.
“For example, they are largely exempt from the Freedom of Information Act. They don’t have the same requirements for declaration of gifts as say politicians do … and they mix and match private and public in a way that is quite improper in public life.”
Says Baker: “All of them are worth 20 billion pounds, at least that’s a very, very conservative estimate. They are all fabulously wealthy.”
Not everyone agrees with such an estimate. “They are millionaires, not billionaires,” David McClure, an author who has written about royal finances, told Forbes.
Either way, there is no escaping the fact the Windsors are seriously rich. Here’s where that all comes from.
Every year the Queen receives a fixed percentage (25 per cent) of the net income from the Crown Estate (which owns vast tracts of London real estate and land around the UK), which last year amounted to a payment of $155 million (the rest of the revenue goes to the Treasury).
That money is used to pay for upkeep of the royal palaces (for example, the $300 million renovation that Buckingham Palace is undergoing) and for travel and office expenses of working royals (excepting security costs, which are not paid for out of grant money).
However, the Sovereign Grant was used to transform Frogmore Cottage from a rundown building into the Sussexes’ new home (though fixtures and furnishings were paid for by the couple).
Currently, it is estimated that three of Harry and Meghan’s office staff are paid for by the grant, and it is not known if they will now personally pick up the tab for these roles.
Different members of the royal family face different arrangements. For example, while Princess Anne receives Sovereign Grant money to pay for her official work expenses, she funds the upkeep of her home Gatcombe Park independently rather than from the grant.
So where does the other 95 per cent of Harry and Meghan’s moolah come from? The Duchy of Cornwall aka the Bank of Dad. Dating back to the 14th century, the Duchy has long been the possession of whoever is the Prince of Wales, the idea being the vast rural land holding would help keep a future king in the style to which he wanted to be accustomed.
Charles took control of the Duchy in 1969 when he became the Prince of Wales and in that time has transformed the 500 square kilometre estate into a thriving, highly successful business. Last year the Duchy earned Charles $40 million, out of which he, in turn, gives princes William and Harry (and their wives) a combined $9.4 million.
However, Charles has faced criticism over the Duchy’s financial arrangements. Baker, writing in his 2019 book And What Do You Do?, reports that while Charles pays tax on his income, he is allowed to make deductions for his 28 personal staff and Camilla’s clothing and jewellery (interestingly, the Duchy also audits itself).
Basically, this is where Harry and Meghan get the money from to buy all of those $2000 hats and to pay for private jets for mini-breaks in Ibiza. However, will Daddy will keep handing over money to his son and daughter-in-law now they have flown the coop? That remains to be seen.
The Duchy of Lancaster is the Queen’s private estate and is valued at $1 billion, according to the most recent accounts. It earned her $40 million in the most recent financial year.
The Duchy owns a huge swath of real estate in central London (such as part of famed Regent St) along with land in Lancashire, Yorkshire, Cheshire, Staffordshire and Lincolnshire and other investments.
The Queen can do whatever she likes with this money, it’s hers to spend as she pleases. We know that she uses this source of income to support Prince Andrew, Princess Anne and the Earl of Sussex. However, according to Baker, Her Majesty “claims these payments as a deductible expense, even though the rest of her family play no role in the Duchy. The result is to reduce significantly the tax bill she (voluntarily) pays.”
He also points out the Duchy does not have to pay any corporation tax despite being termed a “private estate”.
In 2017 when the Paradise Papers hit the headlines, it was revealed that the estate had invested about $10 million in offshore funds. At the time, a spokesman for the Duchy of Lancaster said: “We operate a number of investments, and a few of these are with overseas funds. All of our investments are fully audited and legitimate.”
Ah, now this is where things get even murkier. How much money the Windsors have socked away in their private bank accounts and investment portfolios is something of a guessing game.
In 2015, The Sunday Times rich list reported that the Queen’s investment portfolio is worth $207 million. She also personally owns Balmoral Castle in Scotland and Sandringham House, which have been valued at $200 million and $94 million respectively. And all of that is before we have even considered the royal stamp collection, art, jewels, cars or horses.
A bequest from a king or queen to the heir who succeeds them does not face being hit with inheritance tax.
Baker has written: “The Treasury is estimated to have lost out to the tune of between $37 million to $47 million on the death of the Queen Mother in March 2002.”
Estimates for how much Prince Harry and Meghan are personally worth are up for debate. When the Queen Mother passed away, she is reported to have left her grandson millions of dollars. When Diana, Princess of Wales, was killed in 1997, her $25 million fortune was left to her two sons. Some estimates put Meghan’s worth at about $7 million thanks to her work on Suits and property investments.
All of which might look like small potatoes given there are reports they could become billionaires within a matter of years now they are free to start inking commercial deals on a global scale. Maybe it’s time they bought some racehorses too.
Daniela Elser is a royal expert and writer with 15 years’ experience working with a number of Australia’s leading media titles.