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

Forbes estimated last year that the late royal’s personal fortune was worth $500 million, including his jewelry, art collection, investments and two residences, Balmoral Castle in Scotland and Sandringham House in Norfolk. The Queen inherited both estates from her father, King George VI.

“[Royal wills] they’re hidden, so we don’t really know what’s there and what it’s worth, and that’s never been made public,” Laura Clancy, a professor of media at Lancaster University and author of a book on royal finance, told CNN Business.

But the bulk of the royal family’s wealth — at least £18 trillion ($21 billion) in land, property and investments — is now passing down the centuries-old path to the new King Charles and his successor. .

Thanks to the line of succession, Prince William, now first in line to the British throne, is a much richer man.

The future king inherits the private duchy of Cornwall from his father. The Duchy has an extensive portfolio of land and property comprising almost 140,000 hectares, most of which are in the South West of England.

Founded by King Edward III in 1337, the estate is worth around £1 billion ($1.2 billion), according to the latest financial statements.

Income from the estate is “used to fund public, private and charitable activities,” according to the Duke of Cornwall’s website. That title is now held by Prince William.

The bulk of the family’s money, the £16.5 billion ($19 trillion) Crown Estate, now belongs to King Charles as king. But according to a previous arrangement In 1760, the monarch hands over all profits from the estate to the government in exchange for a portion, called the Sovereign Grant.

The property includes property in central London and seabed around England, Wales and Northern Ireland. It has corporate status and is managed by a chief executive and commissioners – or non-executive directors – appointed by the monarch on the recommendation of the prime minister.

In the last financial year, it generated a net profit of almost 313 million pounds ($361 million). From this, the UK Treasury paid a sovereign grant of 86 million pounds ($100 million) to the Queen. This is the equivalent of £1.29 ($1.50) per person in the UK.

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

The sovereign grant is usually equivalent to 15% of the estate’s earnings. But in 2017, the payment was increased to 25% for the next decade to help pay for Buckingham Palace renovations.

King Charles also inherits the Duchy of Lancaster, a private estate from 1265, which was valued. About £653 million ($764 million) according to its latest accounts. Income from his investments The sovereign grant covers and supports official costs that are not met Help the rest of the royal family.

Restrictions apply

Despite their large sums, the monarch and his heirs are limited in how they can personally profit from their fortunes.

The King can only spend the sovereign grant on royal duties. And neither he nor his heirs are allowed to benefit from the sale of the goods of their duchies. Among other things, proceeds from disposals are reinvested in equity, according to a published explanation Institute of Government (IfG).

The UK Treasury must also approve all major property transactions, the IfG said.

However, unlike the Sovereign Grant Both created by the Crown Estate The duchies are private sources of wealth, meaning their owners are not required to provide details other than reporting income, the IFG said.

Regent Street in London during a pandemic lockdown.  The main retail location is Crown Estate.

Last year, King Charles, then Duke of Cornwall, paid himself £21 million ($25 million) to the Duchy of Cornwall.

Neither Prince William nor King Charles are required to pay any tax on their estates, although both duchies have voluntarily paid income tax since 1993, according to the IfG.

That The move comes a year after the royal family came under fire for plans to use public money to repair Windsor Castle, which was damaged in a fire, Clancy said.

“Of course, voluntary income tax [is] it is not a fixed rate, and they do not have to declare how much income they tax. So it’s actually like pulling an image out of thin air,” Clancy said.

Buckingham Palace did not immediately respond to CNN Business’ request for comment.