Thank you for contacting me about the Royal Family.
The King and the Royal Family have three main sources of funding: the Sovereign Grant, the Privy Purse and HM King’s personal wealth.
The Sovereign Grant is the amount of money provided by the Government to the Royal Household in support of official duties. It is provided by HM Treasury, which is also responsible for monitoring how it is used. It has been decided that the Sovereign Grant will be 12 per cent of the Crown Estates net profits in 2024-25, down from 25 per cent. Cutting the rate to 12 per cent is expected to reduce the Sovereign Grant by £24 million in 2024/25, and decrease the grant by over £130 million in each of 2025 and 2026.
Under this system, the Royal Household is subject to the same audit scrutiny as other Government expenditure, via the National Audit Office and the Public Accounts Committee. Each year, the Royal Household publishes a summary of Head of State expenditure, together with a full report on Royal public finances. The most recent report can be downloaded here: https://www.royal.uk/media-pack/financial-reports-2022-23
The official sources of funding are used entirely to support the King’s work as Head of State. This means that the money goes towards a number of resources which enable His Majesty to carry out his official duties. These include travel for official engagements in the UK and overseas; the maintenance of Royal residencies which are used for formal entertaining and ceremonial events and; salaries for employees of the Royal Household who support and administrate the work of His Majesty as Head of State.
Personal Wealth: Income from the Duchy of Lancaster forms part of HM King's Privy Purse income. The Privy Purse is a historical term used to describe the King's private income and it is largely used to meet official expenditure incurred by His Majesty and other members of the Royal Family which is not met by the Sovereign Grant, and is taxed to the extent that the income is not used for official purposes. Funds not used to meet official expenditure are then, after tax, part of HM King's personal wealth.
The remainder of the King's personal wealth is derived from his personal investment portfolio and private estates, and is used to meet private expenses. The King owns the Balmoral and Sandringham Estates, which were both inherited from his mother.
Income from the Duchy of Cornwall funds the private and official expenditure of The Prince of Wales and is similarly taxed to the extent it is not used to meet official expenditure.
I believe the monarchy is one of the most important institutions of our country. The King is a much loved and respected figure across the globe, and he has been an important figurehead for the UK and the Commonwealth.
Thank you again for taking the time to contact me.
Craig Whittaker MP
September 2023
