King Charles and the late Queen Elizabeth II have received payments equivalent to more than £1bn from two land and property estates that are at the centre of a centuries-old debate over whether their profits should be given to the public instead.
An investigation by the Guardian has established the full scale of income extracted by the royals from the duchies of Lancaster and Cornwall, which run giant portfolios of land and property across England.
The duchies operate as professionally run real estate empires that manage swathes of farmland, hotels, medieval castles, offices, shops and some of London’s prime luxury real estate. They also have substantial investment portfolios, but pay no corporation tax or capital gains tax.
Duchy accounts, held in parliamentary and state archives, reveal how the queen and her first-born son, in his capacity as the Duke of Cornwall, benefited from a huge increase in their revenues from the duchies during her seven-decade reign.
Last year, their duchy income totalled £41.8m. Adjusting for inflation, the pair have received the equivalent of more than £1.2bn in total revenues from the two estates.
Profits from the Duchy of Lancaster, which consists of 18,481 hectares of rural land, primarily in the north of England and the Midlands, automatically pass to whoever is sitting on the throne. The estate itself is valued at £652m.
The Duchy of Cornwall, which encompasses 52,450 hectares, mostly in the south-west of England, is worth more than £1bn. The estate has not kept pace with legislation, passed in 2013, to bring gender equality into royal succession. Its profits still only go automatically to the male heir to the throne.
When Charles, 74, became king last year, the Duchy of Cornwall automatically passed to his son, Prince William, 40, transforming him, on paper, into a billionaire and one of the largest landowners in England. He can expect an annual payment of at least £20m.
Royal claim to duchy income
The royal family’s claim to the income from the duchies stems from archaic charters dating back to when the country was divided into medieval fiefdoms.
Ever since the advent of parliamentary democracy, however, generations of MPs have challenged the arrangement and called for duchy profits to be paid to the Treasury instead. Parliamentary debate has often coincided with the accession of a new monarch, amid renewed scrutiny over their public and private sources of wealth.
The royals insist their duchy income is “private” and the government treats it as entirely separate from the sovereign grant, the annual payment the royal family receives from the government to cover its official costs. That too has risen dramatically in recent times, and costs the taxpayer £86m a year.
Buckingham Palace declined to comment on the Guardian’s figures for income received from the duchies, which it described as “speculative”.
The palace has long stated that income received from both duchies is largely spent on the family’s official duties, public work or charitable causes. However, the royals have never provided a detailed account of how money from the estates is spent, describing them as “private financial arrangements”. Charles has reported that 49% to 51% of his duchy income was spent covering public and charitable functions in recent years.
As Prince of Wales, a large part of Charles’s duchy income was spent privately, including on secretaries, valets, gardeners, chefs, stable hands and farm workers.
The late queen was reported to have used Duchy of Lancaster income to help Prince Andrew pay an undisclosed sum – reported to be more than £9m – to end the sexual assault case filed against him by Virginia Giuffre.
The veteran Labour MP Margaret Hodge, who led an inquiry into the Duchy of Cornwall in 2013 when she chaired the public accounts committee, said parliament had been unable to establish how duchy income was spent.
“It was very unclear,” she said recently. “There is little transparency.”
She described the status of the duchies as a “deliberate ambiguity” and argued that income from them should be taken into consideration by the government when it calculates the next sovereign grant payment.
“If the money from the duchies is part of the state’s contribution to the monarchy, fine, but we should be able to see how it is spent and look at funding of the royal household in the round.”
The Guardian made eight visits to the archives to retrieve accounts for the duchies to reveal how they have transformed royal fortunes.
What are the duchies?
The origins of the Duchy of Lancaster date to 1265, when Henry III seized land after a failed revolt by feudal lords who wanted to limit the powers of the king and gain some representation. The king gave the land, mostly in the north, to his son Edmund.
In the 14th and 15th centuries, two other kings – Henry IV and Henry VII – issued charters reasserting their claim that the Duchy of Lancaster would always remain in the private hands of whoever was on the throne.
Meanwhile, the Duchy of Cornwall was created in 1337 by King Edward III to provide an income for his son from land in southern England. He stipulated via royal charter that the estate would always be owned by the male heir to the throne, who would assume the title of the Duke of Cornwall.
Monarchists argue the royal charters provide the legal justification for the sovereign and heir to claim that revenues from the duchies belong to them, and should be treated as private income. That claim has repeatedly been challenged.
Both duchies were seized by Oliver Cromwell in 1649 after the civil war, and for a brief period of time they belonged to the state. But 11 years later, with the restoration of the monarchy, the duchies were returned to the new king, Charles II.
Two centuries later, the arguments were still raging. Queen Victoria’s claim to the income from the Duchy of Lancaster was fiercely debated in the House of Commons in the 1830s, with many arguing that it should instead go to the public purse. The same occurred in the 1900s, when Edward VII and George V defeated attempts by government ministers to make them give up duchy revenues.
By 1936, with Edward VIII newly on the throne, Clement Attlee, the Labour leader of the opposition, proposed that the royal family surrender the duchies, because “they cannot be considered in any way to be private estates”. In 1972, a private member’s bill to nationalise the duchies was defeated, but more than 100 MPs supported it.
In more recent decades, scrutiny has come from parliament’s public accounts committee. In 2005, it called on the government to examine whether the queen and Charles were receiving too much money from the duchies, concluding: “The current arrangements stem from the 14th century, and the resulting income is to that extent an accident of history.”
Their call for a review appears to have been ignored by the Treasury and, in 2011, when the Conservative-led government changed the mechanism for public funding of the monarchy, they reasserted the idea that duchy income belongs to the royals. George Osborne, the then chancellor, told parliament: “It is a long-established principle of the system that their private finances, for example from the duchies of Lancaster and Cornwall, are their private money.”
Today, the status of the duchies remains ambiguous. They are neither companies, trusts nor charities. The monarch and heir are not permitted to sell off the capital assets for personal gain, ensuring both duchies can be passed on to future royals intact. The duchies are required, under a 19th-century law, to send their annual accounts to parliament. But they are exempt from the Freedom of Information Act.
When William Nye, Charles’s former private secretary, was pressed in 2013 by MPs to explain precisely what the Duchy of Cornwall was, he said it was “a very unusual organisation … It is a private estate, in many respects like other private estates, but in one or two respects not like a private estate.”
Arguably, the most significant difference is their exemption from corporation tax and capital gains tax, the result of a longstanding but ill-defined doctrine that exempts royal bodies from complying with swathes of British laws. That provides the duchies with commercial advantages over conventional property estates in the UK.
From farms to fortunes
Those tax exemptions have helped transform the duchies into lucrative businesses, which have thrived in an era of fast-rising property prices. Both have built teams of experienced executives to manage their portfolios. Alastair Martin, the chief executive of the Duchy of Cornwall, is paid £318,000 a year; Nathan Thompson, his counterpart at the Duchy of Lancaster, receives £267,000.
The Duchy of Lancaster owns rural land across five counties in northern England, including grouse moors, villages and farms. The jewel in the crown of its property empire is the Savoy Estate, a string of high-end properties rented out as shops and offices to commercial firms.
The glossy annual reports for the duchies give the impression they manage bucolic estates. But their portfolios have expanded with shrewd commercial investments in urban real estate.
The Duchy of Lancaster’s portfolio includes warehouses and industrial estates in places such as Basingstoke, Swindon and Redditch. Its most recent acquisitions include a business centre in Harlow, Essex, an industrial estate in Salford, and land at the Forton services on the M6 in Lancashire.
Sir Paul Clarke, who was the Duchy of Lancaster’s chief executive between 2000 and 2013, told the Guardian the estate had a long-term investment strategy to move away from a portfolio that was “for historical reasons” skewed toward less profitable rural land. “We were seeking really to redress the balance,” he said.
The Duchy of Cornwall has undergone a similar transition. It owns arable and livestock farms and homes, as well as a large slice of Dartmoor including the prison, and medieval castles, iron age hill forts, stone circles, oyster beds and upmarket holiday cottages on the Isles of Scilly.
However, it also owns tracts of urban land, such as the Oval cricket ground and flats in Kennington, south London, and a Crowne Plaza hotel in Reading. Unlike his mother, who showed limited interest in the running of her duchy, Charles has been accused of running the Duchy of Cornwall as a modern-day fiefdom.
In the mid-90s, the Duchy of Cornwall led the construction of a new village at Poundbury, in Dorset, built “in accordance” with Charles’s personal vision of a sustainable and architecturally pleasing community.
Around the same time, Charles secretly lobbied John Major’s government to alter the Leasehold Reform Act so that residents of the Somerset village Newton St Loe would be prevented from buying their own properties from their royal landlord. Ministers backed down to “avoid a major row” with the prince.
Charles also, in effect, used his duchy to buy himself two residences, adding to the list of palaces and estates already available to him. In 2007, the duchy purchased a cottage near Llandovery, in Carmarthenshire, for £1.3m, so Charles and his wife, Camilla, could have a Welsh retreat.
And in 1980, the Duchy of Cornwall acquired Highgrove House and 140 hectares of surrounding land to serve as his country home. Set in idyllic Gloucestershire countryside, the late 18th-century mansion was bought for £865,000 and has been extensively renovated.
For 13 years, Charles lived rent-free at Highgrove, which is estimated to be worth as much as £15m. That changed in 1993, when he became his own tenant and, in a circular arrangement, began to pay rent to the Duchy of Cornwall while receiving income from the Duchy of Cornwall.
Buckingham Palace has declined to say why Charles began paying rent that year, or why he was not doing so beforehand. The latest duchy accounts record payments of £659,285 in 2022 for rent on the house and other properties occupied by Charles and his office staff.
In a sign of how entwined royal finances have become, there was a change to Charles’s tenancy arrangement last year: Prince William
, who occupies the position of male heir and, with it, the title of Duke of Cornwall, is now his father’s landlord.