Sovereign Grant reset: how the monarchy is funded and what is changing

What the Sovereign Grant is

The Sovereign Grant is the main source of taxpayer funding for the monarch’s official duties and the upkeep of the royal palaces. It stands at 132.1 million pounds in 2025-26 and is separate from the King’s private income from the Duchy of Lancaster.

The grant covers the costs of the monarch’s official travel, property maintenance, and the salaries of royal household staff. It is paid from the Treasury and is designed to support the constitutional and ceremonial functions of the monarchy, rather than the private finances of the King or his family.

The funding is distinct from the King’s private income, which derives from the Duchy of Lancaster, a portfolio of land, property, and assets held in trust for the sovereign. The Prince of Wales similarly receives income from the Duchy of Cornwall. These private sources are not part of the Sovereign Grant and are managed separately.

The 2026 review and the reset

A five-yearly review concluded in 2026, and a Sovereign Grant Bill will reset the grant down to 99.9 million pounds from 2027-28. The reduction follows the scheduled completion of the ten-year Buckingham Palace reservicing programme, which was budgeted at 369 million pounds.

The review was conducted by the Royal Trustees, who are responsible for assessing the monarchy’s funding needs. The reset reflects the end of the major capital works at Buckingham Palace, which had required additional funding during the reservicing period. Once the programme is complete, the ongoing maintenance costs are expected to fall, allowing the grant to be reduced.

The Sovereign Grant Bill will enact the new funding level, providing a fixed sum for the first year of the next five-year period. The reduction is intended to bring the grant back to a level consistent with the monarchy’s core operational costs, without the temporary uplift associated with the palace works.

How the figure is calculated

The grant is calculated as a percentage of Crown Estate profits, and the reference percentage will be set at 20.5% for 2027-28 to 2031-32. The Crown Estate is an independently run portfolio of land and property valued at more than 15 billion pounds, whose profits go to the Treasury.

The Crown Estate is not the monarch’s private property; it is a statutory corporation that manages a diverse portfolio including urban properties, agricultural land, and parts of the seabed. Its profits are paid to the Treasury, and a proportion of those profits is then allocated to the Sovereign Grant. The percentage is set by the Royal Trustees, who review it every five years.

For the period from 2027-28 to 2031-32, the reference percentage will be 20.5%. This is lower than the current rate, reflecting the reduced funding requirement after the palace reservicing. The calculation ensures that the grant rises or falls in line with Crown Estate performance, providing a stable but variable funding stream.

Tax, transparency and other income

The King’s personal tax payment was published for the first time, at 12.9 million pounds for 2024-25 and 11.7 million pounds for 2023-24. The monarch and the Prince of Wales also receive private income from the two Duchies, which is separate from the Sovereign Grant.

The publication of the King’s tax payment marks a move towards greater transparency in royal finances. The figures reflect tax paid on income from the Duchy of Lancaster, which is not subject to the same public scrutiny as the Sovereign Grant. The King has voluntarily paid tax on this income since 1993, but the amounts had not previously been disclosed.

The Royal Trustees, who oversee the Sovereign Grant, are the Prime Minister, the Chancellor, and the Keeper of the Privy Purse. They are responsible for recommending the grant level to Parliament. The monarchy’s finances are also subject to independent audit, and annual reports are published to provide public accountability.

Frequently asked questions

How much is the Sovereign Grant?

The Sovereign Grant is 132.1 million pounds in 2025-26, and will be reset down to 99.9 million pounds from 2027-28 under a new Sovereign Grant Bill.

Who pays for the monarchy?

The Sovereign Grant is funded by the taxpayer, in exchange for the monarch surrendering the profits of the Crown Estate to the Treasury.

Why is the Sovereign Grant being reduced?

The reset follows the completion of the Buckingham Palace reservicing programme, which lowers the Royal Household's funding needs.

How is the Sovereign Grant calculated?

As a percentage of Crown Estate profits set by the Royal Trustees; the reference percentage will be 20.5% from 2027-28.

Does the King pay tax?

Yes; his personal tax payment was published for the first time, at 12.9 million pounds for 2024-25 and 11.7 million pounds for 2023-24.