The Crown Estate, the Sovereign’s Public Estate

Regent Street is owned by the Crown Estate. Image from Wikimedia Commons

Perhaps, one of the most incorrectly assumed information regarding the fortune of the British Royal Family is that they own the Crown Estate. No, they do not, and neither does the government. Discussing its ownership could be pretty complicated, but to keep it simple, the Crown Estate is a property portfolio owned by British monarch as a corporation sole. It is the "Sovereign's public estate" but is it not the personal property of the monarch.

So, who owns the Crown Estate?

The Crown Estate is owned by the reigning monarch in right of The Crown. Thus, the Crown Estate is tied to the crown and to the monarch himself. Properties owned by the Crown Estate cannot be disposed and not even its revenues are owned monarch.

The Crown Estate’s operation is run by an independent-body called the Crown Estate Commissioners. The Estate’s surplus revenue is remitted every year to the Treasury for the benefit of the nation's finances, thus, the monarch does not directly benefit from estate.

History of the Crown Estate  

The Crown Estate has a long and rich, oftentimes complicated history, dating back from the Norman Conquest. Before the reign of William and Mary, all the revenues of the kingdom were bestowed on the monarch, who took charge of the cost of running the government. These revenues were composed of the hereditary revenues from Crown lands, feudal rights, profits of the post office, etc., and temporary revenues, which were collected from taxes granted to the king for a term of years or for life.

After the Glorious Revolution, Parliament relieved the sovereign from the burden of running the naval military services, as well as paying the national debt. In return, the greater part of the temporary revenues was held by Parliament. The sovereign was left to finance the maintenance of the civil government and royal household, a practice that was observed during the reigns of William III, Anne, George I and George II. However, as Great Britain emerged as a colonial power, state machinery also expanded and more and more civil servants and government workers were hired; the cost of running the civil government piled up, exceeding the income from the Crown lands and feudal rights, thus, leaving the monarch heavily in debts.

Windsor Great Park. Image from Wikimedia Commons

The Crown Estate and Royal Finances

In 1760, George III sealed a deal with the Government over this matter. At the start of his reign, he surrendered the management of the Crown Lands to the Government and the surplus revenues were remitted to the Treasury from then on. In return, Parliament appropriated the King and his household with a fixed annual payment, later known as the Civil List.

At that time, the hereditary excise duties, post office revenues, and the rents of the Crown lands to Parliament, amounted only to £11,000 (£1,633,643 today). The King’s civil list annuity was first set at £800,000 (equal to £118,810,377 today) annually for the support of his household, subject to the payment of certain annuities to members of the royal family. Despite this, the King continued to rack up debts. Over the course of his reign, King George III accumulated over £3 million (equal to £235,546,758 today), thus, calling for the increase of the civil list annuity from time to time.

Every succeeding sovereign from King George III renewed the arrangement with Parliament, which, in 19th century, was considered "an integral part of the Constitution [which] would be difficult to abandon". In 2011, an Act of the Parliament introduced the Sovereign Grant, which reformed the royal finances. The Civil List  payment, then pegged at £13.7 million, was abolished and a new arrangement was set, called the Sovereign Grant.

This financial arrangement consolidated the sovereign’s funding sources.  The Sovereign Grant is paid annually by the treasury at a value indexed as a percentage of the revenues from the Crown Estate and other revenues in the financial year two years earlier. It is based on an index percentage which was initially set at 15% and this is reviewed every five years by the Royal Trustees (the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse).

Crown Estate Portfolio

The Crown Estate’s urban portfolio, includes the entire Regent Street, about half of St James's in London's West End, and retail properties in Oxford, Exeter, Nottingham, Newcastle, Harlow, Swansea, and other parts of U.K.

The estate also owns more than 287,000 acres of agricultural land and forests, together with minerals and residential and commercial property. The Windsor Estate covers approximately 6,300 hectares and includes Windsor Great Park, the Home Park of Windsor Castle, extensive forests, residential and commercial properties, golf courses, a racecourse and let farms.

The Crown Estate also owns about 55% of the UK's foreshore,  UK's seabed from mean low water to the 12-nautical-mile (22 km) limit, and Sovereign rights of the UK in the seabed and its resources vested by the Continental Shelf Act 1964. This means that the Sovereign has rights on the sub-soil and substrata below the surface of the seabed, not to include oil, gas and coal,  renewable energy and  gas and carbon storage.

For more details about the Crown estate visit: https://www.thecrownestate.co.uk.