Prince William inherits 685-year-old estate worth $1 billion

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Royal wills are never publicly released. That means what happens to much of the Queen’s personal wealth after her death on Thursday will remain a family secret.

Forbes last year estimated that the late monarch’s personal fortune was worth $500 million, made up of her jewelry, art collection, investments and two residences, Balmoral Castle in Scotland and Sandringham House in Norfolk (North England). The Queen inherited both properties from her father, King George VI.

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“[Os testamentos reais] are hidden, so we have no idea what’s in them and what they’re worth, and that’s never been made public,” Laura Clancy, a professor of media at Lancaster University and author of a book on real finance, told CNN Business .

But most of the royal family’s wealth – totaling at least 18 billion pounds ($21 billion) in land, property and investments – now passes through a centuries-old, well-trodden path to the new monarch, King Charles III, and your heirs.

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The line of succession makes Prince William, now first in line to the British throne, a much richer man.

The future king inherits the private property of the Duchy of Cornwall from his father. The duchy has a broad portfolio of land and properties covering around 567 square kilometres, most of it in the southwest of England.

Built in 1337 by King Edward III, the property is worth around 1 billion pounds ($1.2 billion), according to his accounts for the last financial year.

Proceeds from the estate are “used to fund the public, private and charitable activities” of the Duke of Cornwall, the website says. That title is now held by Prince William.

By far the biggest chunk of the family fortune, the £16.5bn ($19bn) Crown Estate, now belongs to King Charles as reigning monarch. But under an agreement dating back to 1760, the monarch hands over all of the property’s profits to the government in exchange for a slice, called the Sovereign Grant.

The property includes vast areas of central London and the seabed around England, Wales and Northern Ireland. It has corporate status and is managed by a chief executive and commissioners – or non-executive directors – appointed by the monarch on the recommendation of the prime minister.

In the last financial year, it generated net income of nearly £313 million ($361 million). Thereafter, the UK Treasury paid the Queen a sovereign grant of 86 million pounds ($100 million). This equates to £1.29 ($1.50) per person in the UK.

Most of this money is spent on maintaining the royal family’s properties and paying their employees.

The Sovereign Grant is generally equivalent to 15% of the property’s profits. But in 2017, the payment was increased to 25% over the next decade to help pay for Buckingham Palace renovations.

King Charles III also inherits the Duchy of Lancaster, a private estate that dates back to 1265, valued at around £653 million ($764 million) according to his most recent accounts. The income from their investments covers official costs not met by the Sovereign Grant and helps support other members of the royal family.

restrictions

Despite the large sums, the monarch and his heir are restricted in how much they can personally benefit from their fortunes.

The king can only spend the Sovereign Grant on royal duties. And neither he nor his heir can benefit from the sale of assets in their duchies. Any proceeds from the disposals are reinvested in the property, according to a document published by the Institute for Government’s (IfG), a British think tank.

The UK Treasury must also approve all major property transactions, the IfG said.

Still, unlike the Sovereign Grant generated by the Crown Estate, both duchies are private sources of wealth, meaning their owners are not required to provide details beyond reporting their income, the IFG said.

Last year, King Charles III, then Duke of Cornwall, paid himself 21 million pounds ($25 million) from the Duchy of Cornwall estate.

Neither Prince William nor King Charles III are required to pay any kind of tax on their estates, although both duchies have voluntarily paid income tax since 1993, according to the IfG.

That move came a year after the royal family faced heavy criticism for planning to use public money to repair Windsor Castle, which suffered damage in a fire, Clancy said.

“Of course, voluntary income tax is not a fixed rate, and they don’t have to declare how much income they are paying. So it’s really like pulling a value out of thin air,” Clancy said.

Buckingham Palace did not immediately respond to the CNN Business when was sought for comment.

Source: CNN Brasil

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