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?

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

Exactly. It's archaic

Thank you for this!

Hang on, does that mean the heir is not exempt?

But that William is nonetheless allowed to choose how much he pays and is not obliged to disclose the amount?

Thank you for this!

Hang on, does that mean the heir is not exempt?

But that William is nonetheless allowed to choose how much he pays and is not obliged to disclose the amount?

William will be exempt when he inherits from Charles as he'll then be sovereign. He'd also be exempt if he inherited as King from Camilla, if she outlived his father, and Catherine, if he outlived her.

For IHT he has to pay as normal if he inherits from anyone else.

For that reason the monarch normally leaves absolutely everything to the next one. And, like all rich people, they likely make good use of trust funds (we know the Queen Mother left money to her great-grandchildren via a trust).

Absolutely. It’s highly reminiscent of the Wars of the Roses mentality where you have competing royal houses vying for the throne and bumping each other off. I’m all for future proofing and not treating the world as we find it now as a certainty ok for the future, but equally, I don’t see us going back to the Middle Ages!

For income tax and corporation tax the duchy of Cornwall has an exemption.

William, I believe, follows the precedent set up by Charles of paying income tax on the income he receives after the duchies expenses.

Just to clarify this bit as I think I was unclear - He'd also be exempt if he inherited as King from Camilla, if she outlived his father, and Catherine, if he outlived her. - inheriting from Catherine would only be exempt if he was King and outlived her as his consort.

Yes. I have taken some of the more pro-Royal explanations and arguments on board. But overall, the more I come to read about this, the more I tend to this view too CathyorClaire.

Also, let’s not forget that the PM does a very demanding job for the country and gets paid and housed relatively modestly in relation to the stresses of the job.

The RF still cost a lot overall and this is probably an unpopular view, but I would rather my tax went on paying MPs a higher salary, because then the role would become more available and more attractive to more people hopefully of a better standard than the current lot!

William, I believe, follows the precedent set up by Charles of paying income tax on the income he receives after the duchies expenses.

Charles always gave the amount of tax paid on duchy income
William does not reveal that
A step backwards

A very bizarre call in the current climate.

Given it would absolutely leak out if suddenly the Duchy was paying much less.

Our MPs are currently dismantling our constitutional rights enshrined in Habeas Corpus and Magna Carta, but with their antecedents in the Folk-right legal system that predated the Norman Conquest, These are Revolution worthy changes being imposed without debate, without referendum and without having been in an election manifesto. It’s constitutional vandalism of the sort many people consider treasonous. MPs who go along with this certainly don’t deserve a pay rise. They should reject the party whip and stand up for their constituents.

Thank you!

I suppose it is the enormity of the sums and the vastness of the estates that seems anachronistic when their role is to serve the country.

Or are people arguing that they are a privately rich family anyway who deign to do public services on top and they don’t profit at all from their positions?

Because that is not true of the Duchies is it?

Why did KC3’s wealth shoot up so massively when he acceded to the throne? That can’t be right surely?

Obviously they are entitled to comfort and privacy but it’s the vastness of the wealth and the influence that that obviously brings with it, that makes me uncomfortable.

One of the issues that the Prince Andrew debacle has highlighted is how much deference comes with huge wealth; and how much people will tolerate poor, rude, even illegal and abusive behaviour when someone is viewed an an elite person, and obviously part of the RF’s status is derived from wealth and that is why presumably they wear the tiaras and parade the bling? To signal their wealth and their strength? However much they say they have little true influence or power? And I think this is all becoming very out of step with modern life.

Especially when times are getting financially harder and harder for the ordinary citizen. Our monarch shouldn’t be getting richer and richer as the populace gets poorer I think?

I very much agree with you on those points! What is happening is outrageous and extremely worrying.

Our current MPs, with a few exceptions, are pretty spineless and have let their constituents down on so many fronts!

Which is why I was hoping that a higher salary would attract a higher calibre of representation!

Given it would absolutely leak out if suddenly the Duchy was paying much less.

If William was, you mean.....

One can only assume he is paying less, otherwise why not reveal the amount

Thank you everyone for a very interesting discussion.

I am going to look up the scope of Meg Hillier’s role now thanks to this thread.

I don’t think it will. Most of the current lot are earning far more than they could ever earn elsewhere. They get a generous housing and expenses allowance. The Cabinet get Grace and favour mansion flats and the top 3 get country residences. They seem not to be subject to tax on the freebies that anyone else is required to pay tax on as a benefit in kind.

I think the barriers are twofold. Firstly, the level of intrusion into their private lives that they now face. Secondly, the disembowelling of Parliament over the last 30 years, as power has been moved sideways to unelected anonymous quangos. What’s the pint of being an MP in a chamber that’s good for nothing other than feel good reports on free school meals?

Re what Edward can afford - as pp have said he will have trust funds from LQM and LQ, and if he’s been sensible unlike the Yorks will have made good investments over the years.

The SG pays for working royals expenses when on duty - so travel and staff but does not provide an ‘income’ like the old civil list did. That ‘income’ now comes from the monarch - funded presumably from the Duchy of Lancaster. We don’t know how much Charles ‘pays’ Edward and Sophie for their work.

@Ragsandwhathaveyou972

This is the link to a parliamentary briefing on the finances of the monarchy (I have linked to it a few times on threads - it has useful baseline information and contains details of some of the discussions in parliament during passing of the Sovereign Grant Acts). It talks a little about the Crown Estate.

Finances of the Monarchy

The Sovereign Grant is scrutinised by the National Audit Office and the yearly accounts are a public document. (SG Act 2011 pulled it together - previously looked at by several different departments.)
The accounts of Duchy of Lancaster and Duchy of Cornwall are presented to Parliament each year (Duchies of Lancaster and Cornwall (Accounts) Act 1838). They are public documents and discussed regularly in the Public Accounts Committee.

I expect that Edward has a trust fund set up by his grandparents or parents.

Just like Harry inherited approx £10 million from Diana and another £10 million or so from the trust fund set up by the Queen mother - if you invest the money you should earn around £1 million a year at 4%-5% or investment income.

I don't think we are deferential to them because they are rich. The Queen was old school but I can't imagine W&C are going to be too keen on all the ritual and pomp tbh.

THe reason KC's wealth skyrocketed when he became king was partly beacuse he inherited a significant part of his mother's wealth - eg her racehorses and Sandringham. However he also became nominal owner of Crown property ie the Crown Jewels, the Abraham Tapestries, all the art works in the Royal Collection etc - doesn't mean he can do what he likes with them or sell them though.

@Ragsandwhathaveyou972

Here's two different examples of how other big Windsor Crown properties have been managed.

Fort Belvedere built in the 1750s was home to various members of the royal family with the final royal to live there was Edward VIII until his abdication - he was given it as a 'gift' by his father but as it was still Crown owned it was never really his to own, he just occupied it as a grace and favour property which he paid to maintain. He thought it would always be his to return to but (a bit like Harry and Frogmore) while he was living in France after the abdication, he was told he couldn't have it anymore as it was a perk of the job he'd given up.

Then it was empty for 15 years before being offered to be 'rented' privately on a long lease of 99 years. That lease has been sold on several times to different people and the current occupants are a billionaire Canadian family who have live there since the 1980s. The lease expires in 2053 so at that point the lease will need to be renewed or given up and bought by someone else.

en.wikipedia.org/wiki/Fort_Belvedere,_Surrey

Then there is Cumberland Lodge which was built in the 1600s and was also used by a variety of royal and royal adjacent people but in 1947 was given to an educational foundation to use and it's still used by the charity to this day. I'm not sure what the original warrant required the foundation to pay for in terms of upkeep but there's now a modern charity with a board overseeing the finances. They make money by renting out the facility for private events between their educational programmes, so I assume they are responsible for maintenance but I don't know if they pay any rent or are beholden to a limited time lease.

www.cumberlandlodge.ac.uk/about/history/

So that's three ways they could go with Royal Lodge as soon as Andrew is out - private rent as a residence, private rent as a commercial enterprise, lease to a worthy charity at a lower rent or for free with the provision they have to maintain it.

Why does he pay a peppercorn rent? Because he is, like all of them, a freeloading grifter.HTH.

He's paying a peppercorn rent because he paid for a lease. The question is whether anyone else buying the same lease would have been offered the same terms, £5 million for 150 years. And, will be of interest if he decides to move and sells on his lease for a significantly larger sum.

Going back to Fort Belvedere - when it was first offered up to lease it was 'bought' by Gerald Lascelles on a 99-year lease. When he was short of money after 20 years of living there, he put the lease on the market for 'offers over £200,000', I'm not sure how much it went for in the end to a son of the Emir of Dubai in 1976, who kept it for less than a decade and then sold it on again to the Westons - again not sure what they paid for it in the 80s. Still, it's theirs until 2053 (as long as they meet the conditions of the lease) and they could sell it on before then if they could find a buyer for a relatively short lease and pocket any profit they might be able to make.

The question for the Crown Estates when any of these properties come to the end of their lease, or they are wrestled away from current incumbants is how they want to manage these properties going forward. Lease, or rent? Is it worth getting a massive lump sum up front to invest in other things and not have to pay for the maintenance of the property to make a profit, or play the rental market gamble of paying for the maintenance and hoping for huge rises in market prices for rent.

Actually, I wonder if Charles is buying Andrew out of his Royal Lodge lease?

Thank you @wordler - those explanations are helpful

Leasehold flats are very common in London. They are regarded as buying the property not renting. You buy the lease and then pay "ground rent" to the landowner.

Here is a prime example.
You pay £500K for a 140 year lease
Then pay "rent" of £100 per year for the land it sits on
https://www.rightmove.co.uk/properties/153999005#/?channel=RES_BUY

£6.5 million that Edward paid for initial lease/repairs was a lot of money in 2007 when relatively few houses cost £1 million+ - according to the BoE inflation calculator it would be like paying £11.5 million today.