Prince William just inherited a 685-year-old estate worth $1 billion

 

Royal wills are never made public. Since the Queen passed away last week, it will therefore remain a family secret what happens to much of her personal riches.

The late monarch's personal riches, which included her jewels, art collection, investments, and two homes—Balmoral Castle in Scotland and Sandringham House in Norfolk—was valued at $500 million by Forbes last year. Both properties were given to the Queen by her father, King George VI.

According to Laura Clancy, a lecturer in media at Lancaster University and the author of a book on royal finances, "[royal wills] are hidden, so we have no idea actually what's in them and what that's worth, and that's never ever made public."

However, the main majority of the Royal family's wealth—at least £18 billion ($21 billion)—now transfers to the next king, King Charles, and his successor following a well-traveled, centuries-old road.

Prince William, who is currently first in line for the British throne, is a lot wealthier man as a result of the line of succession.

The exclusive Duchy of Cornwall estate passes to the future monarch from his father. The majority of the nearly 140,000 acres of land and property that the duchy owns are in southwest England.

The estate, which King Edward III founded in 1337, is estimated to be worth $1 billion (£1 billion) based on its most recent financial statements.

According to the estate's website, money from the estate is "used to fund the public, private, and charitable activities" of the Duke of Cornwall. Prince William now holds that position.

The £16.5 billion ($19 billion) Crown Estate, by far the largest portion of the family's wealth, now belongs to King Charles as the current monarch. The monarch, however, turns over all estate revenues to the government in exchange for a piece, known as the Sovereign Grant, under a 1760 agreement.

It had a net profit of over £313 million ($361 million) during the most recent fiscal year. The Queen received a Sovereign Grant of £86 million ($100 million) from the UK Treasury as a result. In the United Kingdom, that amounts to £1.29 ($1.50) per person.

Most of this money is spent on maintaining the Royal family's properties and paying their staff. 

The Sovereign Grant is usually equivalent to 15% of the estate's profits. But, in 2017, the payment was bumped up to 25% for the next decade to help pay for refurbishments to Buckingham Palace.

In addition, King Charles receives the Duchy of Lancaster, a private estate that dates back to 1265 and has a current estimated value of £653 million ($764 million). The profits from its investments assist to support other Royal family members and pay for official expenses that are not covered by the Sovereign Grant.

There are constraints

Despite the enormous funds, the monarch and his heir are limited in how much they can use their fortunes for personal gain.

The Sovereign Grant may only be used by the King for official duties. Additionally, neither he nor his successor may profit from the sale of any of their duchies' assets. The Institute for Government's explainer states that any proceeds from sales is re-invested into the estate (IfG).

All significant real estate deals also require the UK Treasury's approval, according to the IfG.

However, both duchies are private sources of wealth, unlike the Sovereign Grant produced by the Crown Estate, therefore their owners are not compelled to divulge any information beyond disclosing their income, according to the IFG.

The Duchy of Cornwall estate was used to pay King Charles ($25 million) last year, while he was still the Duke of Cornwall.

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

According to Clancy, the Royal family faced harsh criticism a year prior for wanting to use taxpayer funds to renovate Windsor Castle after a fire had caused damage to it.

Clancy explained that voluntary income tax "is literally just like pulling a figure out of thin air because it's not like voluntary income tax [is] a predetermined rate, and they don't have to reveal how much money they're making their tax on."

source CNN BUSINESS

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