So how come Prince Edward is paying a peppercorn rent as well?

[Ragsandwhathaveyou972]

Can someone help me properly understand this please?

For years I have wondered aloud on here, under various nns, how Prince Edward can afford to live in a £30 million mansion when by all accounts his income is roughly £150,000 per year? Just because it didn’t seem fair!

Full disclosure: I have nothing against the Royals themselves but I would prefer a much slimmed down monarchy and eventually after many years, an elected Head of State.

And the official explanation seemed to be that as he is privately wealthy, he is putting funds in to renovate the property in exchange for a much reduced rent.

https://www.hellomagazine.com/royalty/870243/prince-edwards-peppercorn-rent-revealed/?viewas=amp

So initially, Edward seemed to pay a market rate rent of £5,000, which increased to £90,000 after he paid £1.36 million for renovations.

However, he later secured a 150-year lease extension in 2007 by paying £5 million upfront, and since then, he has been paying a "peppercorn" (a very nominal amount) rent presumably in exchange for keeping it in good nick?

Fair enough you might think. He is privately wealthy and the cost of renovating somewhere that size has to be enormous.

However, what I am really confused about now is the Crown Estate, the body with which these rents are negotiated.

Is it a public or royal organisation?

I initially thought it qualified as a royal organisation because it is owned by the monarch, but its profits go back to the Treasury, which surely then makes it a public body?

So if it is the latter, and its profits go in to the public purse, why are Edward and Sophie and their two dc living in a house with 120 rooms and paying a relatively small rent, when the Crown Estate should be extracting as large a rent for the public purse as possible?

Is this right? Happy to stand corrected.

And my other question is why is this arrangement so complex and the lines between public and private funding
so blurred?

In any other charity or organisation in this day and age, surely you have to have a clear, transparent division between the two?

I think it’s a desire not to set a precedent. The Duchy of Cornwall’s deep levels of protection predate the modern regulatory and tax environment. They were agreed in the 13th century to protect the heir to the throne ( who might not be the monarch’s son or preferred heir) and ensure their autonomy. Each beneficiary is in that role temporarily, after which they become monarchy and lose control of the Duchy, so the set up denies any current beneficiary from doing anything deemed to damage the Duchy for future beneficiaries.

I’d like it if they also paid Inheritance tax. It seems the royals are exempt from it whilst we’re taxed on everything.

Peppercorn rents are very common. Both my daughters pay a peppercorn rent. They live in one-bedroom flats.

I think the important question is not how much the rent is, but how much was paid for the lease. I have no idea whether or not £5m was an appropriate figure for Prince Edward to pay. My daughters obviously paid substantially less than that. On the other hand, their leases are for over 900 years.

Most of them aren’t exempt, only the monarch and the Prince of Wales. The big auction of Princess Margaret’s jewellery etc was to settle the inheritance tax bill, which was about £3 million. I’d imagine the Gloucesters, who are relatively cash poor - they rented out their country home for years but finally sold it a few years ago, as the upkeep was too much - but jewel rich, will have a fairly whopping bill as well so they’ll either have to sell a lot of tiaras or donate to museums in lieu of tax. Anne’s kids will have a hefty bill for Gatcombe Park and her personal jewellery etc.

@Teddleshon1 @OccasionalHope fair comments re: difference between renting and leasing and paying for upkeep, renovations etc. However, I think given the uniqueness of the property/properties we are talking about, it’s hard to put a ‘market value’ on them. But I do think £90k pa (which is £7.5k pm), it’s still a bloody good deal for a 120 room property even taking into account upkeep, insurances etc. and possibly not really ‘market value’.

It’s also about the transparency of these arrangements which is why people are interested.

Upkeep for stately homes etc is insanely expensive- which is why in germany and france, castles arr quite often on the market for 1€… you are responsible for the upkeep which easily runs into 10s of thousands ore even mire
A peppercorn rent and upkeep is a lot morecrx

This is how it works. It's not a big deal.

Some things have to be handled differently from you and me though.

Crown estates and properties are "for the nation". Start paying rent or inheritance tax and they will sold to foreign billionaires. Is that better? Or do we want them maintained as national assets?

Same with farm tax. Yes, farmers own land, it has value, but start charging inheritance tax and it gets sold off, and eventually you are left with nothing.

Q-why is it also complicated?
A- obfuscation! We peasants won't be able to understand it and we'll just continue blindly worshiping them because they are wealthy & monarchs

I think that one of the areas of confusion is the term "rent". There are 2 types of rent - the one most people pay if they don't own the property they live in. That is a rent for the use of the building. However, any leasehold property may well also have to pay a ground rent - ie a rent for the unadorned ground on which the property stands. I imagine that some of the £90k is the ground rent. Also normally when someone rents a property the landlord remains liable for the repairs to the fabric etc - a landlord's repairing lease. However it is also possible to get a lease where the tenant is responsible for paying for repairs - a tenant's repairing lease. Obviously, the rent on the former will be higher than the rent on the latter due to the transfer of repairing obligations from landlord to tenant. Edward has the latter so you would expect the rent to be lower than a standard lease. As PPs have said repairs to a historic property of this size are very substantial hence the lease being at a lower rent than would be the case if repairs were not to be met by E&S.

No, I'm not saying you should trust them, just that they are literally above the law.

I agree with you CanYouHereMeRoar Sophie and Edward have increased their engagements and overseas tours in recent years, since the departure of AMW, Harry & Meghan and with the King & Catherine’s health issues. I don’t have a problem with their accommodation as they are working royals and they are supportive to the King and other senior royals.

Thanks for the explanation.

I suppose I am wondering how he is he able to afford repairs on a house of that size? Which is partly why I was suspicious about all of this in the first place?

The annual running costs alone must be enormous. Are they sufficiently privately wealthy to be able to afford it?

Does the Crown Estate carry out any maintenance at all?

I thought I read something about Andrew’s house that they were responsible for the grounds, but don’t quote me on that.

Like most houses, Bagshott must need a big overhaul every decade or two? Where do they get the money for that? It’s in Surrey so it’s in a prime location where everything is expensive.

I'm more baffled as to why the incredible rick QE never bought Edward a nice house? She definitely had the money to. I'd do this if I was rich.

There are different ways to preserve buildings though! I agree that some of our taxes should go to preserve buildings of outstanding historical interest or architectural merit.

But buildings like Bagshott? Not so sure!

Would it be so bad if it was renovated and turned in to a rather grand hotel and more people could enjoy it?

I just heard on a podcast that before Sophie and Edward moved in there were two bids on the property, one of which was for a conference centre.

My question is therefore; if the Crown Estate is a truly separate commercial body; then it should have rented it out to the owners of the Conference centre shouldn’t it; providing their business model was sound, thus ensuring the most financial rewards for the Treasury?

Or is the Crown Estate biaised in the interests of the RF? Or is it independent?

You can’t have it both ways surely? Isn’t that what is known in the real world as a conflict of interest?

William is not paid directly from The Sovereign Grant but the SG covers official duties of all working members of the royal family including him. So as usual smoke and mirrors

As far as paying tax on his £23million duchy dosh... We have no idea how much tax he pays. I imagine it won't be what you or I would pay because otherwise he would declare it like his father did for decades

In a leasehold property the land is owned by a company (in this case crown estates) and the house by you. So that might explain the financial arrangements.

Is it written down anywhere who is exempt and who is not?

Are the public privy to this information?

Thank you jumpingthehighjump

Both good points!

Yes, farmers own land, it has value, but start charging inheritance tax and it gets sold off, and eventually you are left with nothing.

Farmers pay half of what everyone else does and they are given 10 years to pay. Jeremy Clarkson went into farming to avoid IHT, he is on record saying this. And did you know James Dyson owns more land than the King? Same reason.

Because when he got married there had been all the "South York" jokes and the issues over Sunninghill when Andrew and Sarah had divorced.

There was also a lot of discussion around the time of Anne's divorce about Gatcombe and the potential of her losing it due to mark being entitled to part of it.

Ever since then it's very much been renting from Crown Estates that she 'gifted' - presumably she paid the rent for a period as well.

Hmmmm. Thanks for providing the historical context. I find it fascinating actually.

But surely we need a little post 13th century upgrade of arrangements? 😀

Is it written down anywhere who is exempt and who is not?

Are the public privy to this information?

Yes, the exemption is only Sovereign to Sovereign and Sovereign to consort.

It was reworked as part of the agreement set up by John Major after the Windsor fire "who should pay" saga.

Thank you for this information. I’m trying to understand it!

Edward will have inherited from his Grandmother and idc the Queen. Beyond that if the monarch chooses to sub him from their private funds I don't really have a problem. After their disastrous attempts to fund themselves they have settled down to be dignified and hard working members of the Royal Family and if that family helps those members (rather than AMW) I think that is OK.

The Crown Estate is subject to Parliamentary scrutiny - Meg Hillier has been all over it recently and is reviewed by the National Audit Office.