When people remember King Charles III. When they think, they tend to think of the former Prince of Wales playing polo, shaking hands, speaking at charity events or praising organic gardening. But while doing all this, he also built a business empire that is now worth over £1 billion and growing.
When Charles is spoken of, then as a private citizen, as a long-time civil servant and now, at 73, also as head of state. What belongs to private individuals and what belongs to the state is not always easy to tell apart. There is no question that much of the glitz and glitz, including the Crown Jewels, Windsor Castle, Kensington Palace and Buckingham Palace, belongs to the country and not the royal family.
Nevertheless, Charles III. – whose likeness will soon grace the country’s currency – has an extensive real estate and investment portfolio. A look at his portfolio reveals business interests shaped by tax breaks, real estate deals and some offshore investments.
The Duchy of Cornwall, a historical anomaly
As Prince of Wales, Charles derived most of his income, from which he met his personal and official expenses, from the Duchy of Cornwall. This is a private company that owns approximately 52,450 hectares of land spread over more than 20 counties in England and Wales. Its real estate portfolio includes 260 fully serviced farms, forests and numerous residential and commercial properties. Parts of the coast also belong to the duchy. It also has numerous financial assets.
Buckingham Palace, the most famous of the royal residences, belongs to the people
The duchy was created in 1337 and initially served to secure a material basis for the heir to the throne. The respective beneficiary is prohibited by law from selling assets. He only receives a payment from the income generated. In 1969, when Charles turned 21, he received the full earnings of the duchy for the first time. By the early 1980s, he had already begun to take a more active interest in what had previously been a rather relaxed company.
“What Charles did differently was that he took part in professionalizing the company for the late capitalist age. The duchy, for example, hired managers and other professional staff who diversified the portfolio,” explains Laura Clancy, lecturer at Lancaster University and Author of the book “Running the Family Firm: How the monarchy manages its image and our money”.
The management team is currently supported by 180 staff at the London headquarters and various local offices. The main focus is still on property management, rental income and property development. But in 2017, documents known as the Paradise Papers revealed funds were also being invested in offshore companies. It may be embarrassing, but a spokesman protected Charles by saying others are responsible for investment decisions.
Although many leases are long-standing, various tenants have complained over the years that they are not being treated fairly. It was revealed last year that the then-Prince had used his influence for decades to scrutinize laws and prevent tenants from acquiring land. For the prince, the Duchy of Cornwall was a gold mine.
More professional and profitable
In the 2002/2003 financial year, the Duchy recorded income of around £10m (€15m at the then exchange rate) which was remitted to Charles. The overall value of the duchy was around £400 million. Since then, according to the annual reports, the numbers have increased almost every year.
For 2011/2012, the Duchy reported revenue of £18.3m and valued assets at £728m. For the 2021/2022 financial year ending 31 March, the duchy reported income for the prince of £23million on total assets of £1.05billion. So, over a period of almost 20 years, income has more than doubled while assets have increased even more.
And the duchy can count itself lucky in other respects as well: It is exempt from paying corporation tax. Since 1993, however, the prince has voluntarily paid income tax on the income generated by the duchy – after deducting his official expenses.
From the duchy to greater goals
Now that Charles is King, he passes the Duchy of Cornwall to his son William. The new king will instead have three new sources of income: income from the Duchy of Lancaster, payments from the Crown Estate and his share of Queen Elizabeth’s personal fortune.
It will be difficult to follow in Queen Elizabeth II’s footsteps
That Duchy of Lancaster can be compared to the Duchy of Cornwall. It does not belong to the king or queen, but they can derive income from it. In 2021, the Duchy of Lancaster and its 18,000 hectares of land and top London properties generated £24m (€27m) for the Queen, for a combined value of £652m (€746m).
That Crownestate, the Crown Estate owned by the British Crown, is a multi-billion dollar real estate empire which, among other things, owns much of the seabed around the islands. These assets do not belong to the monarch himself either, but he is guaranteed a payment from the proceeds, the so-called “sovereign grant”. The crown estate is administered by a body without the involvement of the royal family. Last year it brought in £313m (€358m) in profits and paid the Queen £86m (€98m) for official duties, staff, travel and upkeep of the palaces. The rest went to the government.
Adding to all of this is the inheritance Charles is due directly from his mother’s fortune. Properties such as Balmoral Castle in Scotland where Queen Elizabeth died, Sandringham, racehorses, cash, investments and an irreplaceable collection of jewellery, art and furniture accumulated over generations. Estimated last year forbes the Queen’s personal fortune to around 410 million euros.
Too rich for the people?
When it comes to investment, the Queen has reportedly been reluctant to manage. Many are now wondering whether King Charles will be as dedicated to his newfound financial interests as he was as Prince of Wales. But whether or not the king takes the financial reins himself, he cannot hide the fact that these privileges have been in place for centuries and are not based on personal achievement. They are a reminder of the overwhelming power that exists in a constitutional monarchy.
How close can King Charles and his wife Camilla be to the people?
Many people are also bothered by the fact that an agreement reached with the government decades ago exempted Charles from paying the usual 40 percent inheritance tax. However, others argue that the royal family is a magnet for tourists, giving the UK a unique opportunity to advertise itself.
Lancaster University’s Laura Clancy refers to the royal family as a company in order to expose them as a commercial enterprise and to understand their wealth and power. But she doesn’t believe that wealth, a lack of transparency and the inequality that comes with the monarchy will be its undoing. The Queen’s secret was her “silent presence,” says Nikhil Kumar, deputy editor for global affairs Grid. She stayed out of public debates. Her longevity gave her “the shine of history”. It remains to be seen whether King Charles can follow their lead. If not, all the money in the world may not be able to save the monarchy.
Adapted from the English by Phoenix Hanzo.
