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The coronavirus pandemic is hitting the vast real estate empire that provides Queen Elizabeth II with a significant portion of her income. British taxpayers could make up the shortfall in the coming years.
Michael Stevens, the Queen’s treasurer, confirmed in a statement on Friday that the size of the Sovereign Grant, one of the royal family’s main sources of income, will not be affected by an expected drop in investment earnings from Crown Estate.
The Sovereign Grant is a global payment from the government that covers official travel, personnel expenses, and palace expenses. The grant is generated from the Crown Estate, a real estate company with an extensive collection of farmland and prime properties in central London. Most of the Crown Estate’s profits go to the government coffers, but the government pays 25% to the Queen in the form of Sovereign Grant.
Last week, the Crown Estate reported a record profit of £ 345 million ($ 440.2 million) for the year to March 2020, but warned that profits for the fiscal year to March 2021 will be “significantly less” than that amount due to the impact of the pandemic on your portfolio.
Much of central London became a ghost town earlier this year, as the closure kept millions of workers, shoppers and tourists away. Activity began to pick up during the summer months, but new restrictions introduced this week to combat a second wave of the virus are expected to affect that recovery.
But the Queen will not accept a pay cut even if revenue falls at the Crown Estate this year. The way the grant is calculated means that you will receive your share of £ 345 million – £ 86.3 million ($ 110 million) – in the year to March 2022. Your payment will also remain at that level for years to come, even if the Crown Estate benefit is still under pressure, because the law governing the grant does not allow it to fall in absolute terms.
“In the event of a reduction in Crown Estate earnings, the Sovereign Grant is set at the same level as the previous year,” a Treasury spokesperson told CNN Business. “The Sovereign Grant finances the official business of the Monarchy and does not provide private income to any member of the royal family,” the spokesman said.
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