26 November 1992: The Queen volunteers to pay income tax

With Britain in recession and Windsor Castle having recently caught fire, the Queen's request to pay income tax was accepted by Parliament, on this day in 1992.

The dawning of the 1990s brought with it the first contractions in the British economy. With money tight, people started to look around for ways to cut down on state spending. It was only a matter of time before the Queen fell under their gaze.

In 1992, Her Majesty informed the prime minister, John Major, that she wished to make a few tweaks to her tax affairs. She wanted to been seen to be paying income tax just like anybody else. The matter took on a greater urgency later that year, when Windsor Castle, one of her favourite royal residences, caught fire. It wasn't going to be cheap to repair.

It wasn't too surprising, then, that just under a week after the blaze, on 26 November, Parliament happily agreed to the new arrangements, which took effect the following April. In addition, only the Queen, the Duke of Edinburgh and the Queen Mother would receive funds from the public purse from now on.

Back then, as now, the Queen received income from three main sources. There was the Civil List, a state grant these days called the Sovereign Grant, which amounts to 15% of the profits from the Crown Estate, and which covers official expenditure. The Sovereign Grant was £49.4m in 2019-20, with an extra £33m to go on "re-servicing" Buckingham Palace. 

Then there are her own private investments, which are just that – private, so never you mind. And lastly, the Duchy of Lancaster, which makes up the bulk of the Privy Purse. The modern Duchy of Lancaster was created way back in 1399 as a way to provide the English monarch with a few bob. It is run for the Queen, but not by the Queen, and it is essentially the mother of all property portfolios. Comprising around 18,433 hectares in England and Wales, the portfolio also includes office, retail and industrial properties, with a combined value in the region of £538m. And of course, there's Windsor and nine other castles. For the year to March 2020, the Duchy of Lancaster raked in £23m, a 7% increase on the previous year. It is on these revenues that the Queen pays income tax. Exactly how much isn't disclosed.

 

Recommended

Joe Bauernfreund: why Japan is an active investor's dream market
Investment strategy

Joe Bauernfreund: why Japan is an active investor's dream market

Merryn talks to Joe Bauernfreund of the AVI Japan Opportunity Trust about the opportunities for investors in Japan, a hugely under-researched market w…
29 Jul 2021
What does the US dollar’s sudden about-turn mean for the markets?
Currencies

What does the US dollar’s sudden about-turn mean for the markets?

After rallying strongly since late spring, the US dollar wobbled this week. Dominic Frisby looks at where the greenback is going next, and what that m…
29 Jul 2021
Big tech smashes expectations with bumper profits
Tech stocks

Big tech smashes expectations with bumper profits

Big tech companies have reported profits far in excess of expectations, with Apple, Alphabet and Microsoft generating a combined $56.8bn. Saloni Sarda…
28 Jul 2021
Oil is taking a well-earned rest. But the bull market isn’t done yet
Oil

Oil is taking a well-earned rest. But the bull market isn’t done yet

The oil price has more than doubled in the last five years. It’s come off the boil recently, but in the longer term, things are still looking good. Do…
28 Jul 2021

Most Popular

The MoneyWeek Podcast: Asia, financial repression and the nature of capitalism
Economy

The MoneyWeek Podcast: Asia, financial repression and the nature of capitalism

Russell Napier talks to Merryn about financial repression – or "stealing money from old people slowly" – plus how Asian capitalism is taking over in t…
16 Jul 2021
Why the UK's 2.5% inflation is a big deal
Inflation

Why the UK's 2.5% inflation is a big deal

After years of inflation being a financial-assets problem, it is now an “ordinary things” problem too, says Merryn Somerset Webb. But central banks st…
16 Jul 2021
Three companies that are reaping the rewards of investment
Share tips

Three companies that are reaping the rewards of investment

Professional investor Edward Wielechowski of the Odyssean Investment Trust highlights three stocks that have have invested well – and are able to deal…
19 Jul 2021