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Does UK tax go to the Royal Family?

  • 4 min read
  • 5 May 2023
Does UK tax go to Royal Family - TaxScouts

So, does the UK tax go to the Royal Family? The big question on everyone’s lips, especially since the recent passing of the Queen. 

The short answer is yes, some UK tax does go to the Royal Family. This is most commonly through the Sovereign Grant. But let’s take a look at how much of taxpayers money is actually paid to the Royal Family.

What exactly is the Sovereign Grant?

Back in 2011, the government introduced the Sovereign Grant Act:

  • An annual payment to the Royal Family 
  • It funds the Royal Family’s official duties, e.g providing enough Prosecco for the swanky garden parties 🍾
  • It also funds staff and maintenance of the royal palaces
  • The 2022-2023 Sovereign Grant was around £86 million a year but can exceed £369 million if the palace urgently requires 30 more clocks 
  • This money comes from HM Treasury and is funded by the taxpayer 
  • Royals do not pay tax on income from the Sovereign Grant

Not all royals are funded by the Sovereign Grant though, so that’s less people for King Charles to share the money with! 

So, is that everything?

Actually, no. The Sovereign Grant doesn’t include 24/7 personal security for senior royals which is also publicly-funded. The actual figure of how much is spent on security remains a secret as there is a high chance it could ‘compromise the safety of the royals’. 

Royal ceremonies are also left out of the Sovereign Grant, and can cost taxpayers millions of pounds. So we’ll have to bear that in mind the next time a royal pops the question!

So the taxpayer pays for everything?

Not everything! Surprisingly, a whopping £86 million isn’t enough to cover all of the Royal Family costs. So, the Royal Family have multiple streams of income:

  • Inherited estates e.g. Balmoral Castle
  • Personal assets e.g. artwork
  • An investment portfolio 
  • The Privy Purse/Duchy of Lancaster, which is land across England and Wales and other private assets which bring in around £24 million a year

The Royal Family is worth a cool £24 billion in total, but it’s safe to say the taxpayer doesn’t account for it all.

How much do the Royal Family bring into the UK economy?

So we know the Royal Family splashes a large portion of UK tax money on official duties, central staffing, maintenance, and security. But how much revenue does the Royal Family bring to the economy?

Well, you can’t visit the UK without visiting a royal resident hotspot, can you?! Buckingham Palace, Windsor Castle and Frogmore House are just some of the royal tourist attractions which bring in tens of millions of pounds every year.

Besides ticket sales, the Royal Family also bring in revenue from:

  • Souvenirs
  • Hampers
  • Publishing
  • Gift shop sales (who doesn’t love a Queen Elizabeth bobblehead?) 

All in all, the Royal Family can easily bring in £71 million pounds a year just for being the Royal Family! We can only dream!

Does the Royal Family pay tax?

The Royal Family aren’t liable to pay tax, but some choose to in some cases. For example Queen Elizabeth voluntarily paid taxes on:

  • Capital Gains profits
  • Selected income

Here’s where it gets rather interesting: 

‘Sovereign to sovereign’ inheritance is not liable for tax. This means that King Charles will not pay the standard 40% tax after inheriting his late mother’s assets which are valued well over a billion pounds. 

He has instead opted to follow in the footsteps of the Queen by paying income tax on selected income, what a generous King! 👌

The rules are clearly a bit different for royals so as mentioned, they aren’t taxed on the income they receive from the Sovereign Grant. That would essentially be taking money from the taxpayer just to give some back, which would be a bit confusing and some may say, pointless.

For a full breakdown of which members of the Royal Family pay taxes, and what taxes they pay, read our ‘The UK royals who pay their taxes’ blog.

Need tax advice?

We get it – it’s not the most interesting topic and can get pretty confusing, pretty quickly. That’s why our accredited accounts offer professional yet friendly, digestible tax advice. Find out how to book a 45 minute consultation here.

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