Duchy of Lancaster


The Duchy of Lancaster is the private estate of the British sovereign as Duke of Lancaster. The principal purpose of the estate is to provide a source of independent income to the sovereign. The estate consists of a portfolio of lands, properties and assets held in trust for the sovereign and is administered separately from the Crown Estate. The duchy consists of of land holdings, urban developments, historic buildings and some commercial properties across England and Wales, particularly in Cheshire, Staffordshire, Derbyshire, Lincolnshire, Yorkshire, Lancashire and the Savoy Estate in London. The Duchy of Lancaster is one of two royal duchies: the other is the Duchy of Cornwall, which provides income to the Duke of Cornwall, which is traditionally held by the Prince of Wales.
In the financial year ending 31 March 2018, the estate was valued at about £534 million. The net income of the Duchy is paid to the reigning sovereign as Duke of Lancaster: it amounts to about £20 million per year. As the Duchy is an inalienable asset of the Crown held in trust for future sovereigns, the sovereign is not entitled to the portfolio's capital or capital profits. The Duchy of Lancaster is not subject to tax, although the Sovereign has voluntarily paid both income and capital gains tax since 1993. As such, the income received by the Privy Purse, of which income from the Duchy forms a significant part, is taxed once official expenditures have been deducted.
The Duchy is administered on behalf of the sovereign by the chancellor of the Duchy of Lancaster, a government minister appointed by the sovereign on the advice of the prime minister, and by the clerk of the Council. Day-to-day management of the estate's properties and investments is delegated to officers of the Duchy Council, while the Chancellor is answerable to Parliament for the effective running of the estate.
The Duchy exercises some powers and ceremonial duties of the Crown in the historic county of Lancashire, which includes the current Lancashire ceremonial county, Greater Manchester and Merseyside as well as the Furness area of Cumbria. Since the Local Government Act 1972, The Queen in Right of the Duchy appoints the High Sheriffs and Lords Lieutenant in Greater Manchester, Merseyside and Lancashire.

History

The Duchy of Lancaster was created for a younger son of King Edward III, John of Gaunt, who acquired its constituent lands through marriage to the Lancaster heiress Blanche. As the Lancaster inheritance it dates to 1265, when Henry III granted his younger son, Edmund Crouchback, lands forfeited by Simon de Montfort, Earl of Leicester. In 1266, the estates of Robert de Ferrers, 6th Earl of Derby, another protagonist in the Second Barons' War, were added. In 1267 the estate was granted as the County, Honour and Castle of Lancaster. In 1284 Edmund was given the Manor of Savoy by his mother, Eleanor of Provence, the niece of the original grantee, Peter II, Count of Savoy. Edward III raised Lancashire into a county palatine in 1351, and the holder, Henry of Grosmont, Edmund's grandson, was created Duke of Lancaster. After his death a charter of 1362 conferred the dukedom on his son-in-law John of Gaunt, Earl of Lancaster, and the heirs male of his body lawfully begotten for ever.
The first act of Henry IV was to declare that the Lancastrian inheritance be held separately from the other possessions of the Crown, and should descend to male heirs. This separation of identities was confirmed in 1461 by Edward IV when he incorporated the inheritance and the palatinate responsibilities under the title of the Duchy of Lancaster, and stipulated that it be held separate from other inheritances by him and his heirs, but would however be inherited with the Crown, to which it was forfeited on the attainder of Henry VI. The Duchy thereafter passed to the reigning monarch, and in 1760 its separate identity preserved it from being surrendered with the Crown Estates in exchange for the civil list. It is primarily a landed inheritance belonging to the reigning sovereign.
In 2011, the Duchy established a rebalancing asset plan and sold most of the Winmarleigh estates farms in Lancashire, and donated a plot of land to the Winmarleigh Village Hall committee by June 2012.
In 2017, the Paradise Papers revealed that the Duchy held investments in two offshore financial centres, the Cayman Islands and Bermuda. Both are British Overseas Territories of which Queen Elizabeth II is monarch, and nominally appoints governors. Britain handles foreign policy for both islands to a large extent, but Bermuda has been self-governing since 1620. The Duchy's investments included First Quench Retailing off-licences and rent-to-own retailer BrightHouse. Labour Party Leader Jeremy Corbyn posited whether the Queen should apologise, saying anyone with money offshore for tax avoidance should "not just apologise for it, recognise what it does to our society". A spokesman for the Duchy said that all of their investments are audited and legitimate and that the Queen voluntarily pays taxes on income she receives from Duchy investments.

Role

The duchy is the personal property of the monarch and has been since 1399, when the Dukedom of Lancaster, held by Henry of Bolingbroke, merged with the crown on his appropriation of the throne.
The chief officer is the Chancellor of the Duchy of Lancaster, a position sometimes held by a cabinet minister but always a ministerial post. For at least the last two centuries the estate has been run by a deputy; its chancellor has rarely had any significant duties pertaining to its management but is available as a minister without portfolio.
The monarch derives the privy purse from the revenues of the Duchy. The surplus for the year ended 31 March 2015 was £16 million and the Duchy was valued at just over £472 million. Its land holdings are not to be confused with the Crown Estate, whose revenues have been handed to the Treasury since the 18th century in exchange for the receipt of a yearly payment.
The Duchy Council's primary officers carrying out the estate's day-to-day duties are the Clerk of the Council, the Chairman of the Council, and the Chief Finance Officer. The chancellor is responsible for the appointment of the steward and the barmaster of the barmote courts on behalf of the Queen in right of Her Duchy.

Royal prerogative

Both the Duchy of Lancaster and the Duchy of Cornwall have special legal rights not available to other estates held by peers or counties palatine, for example, bona vacantia operates to the advantage of the Duke rather than the Crown throughout the Duchy. Proceeds from bona vacantia in the Duchy are divided between two registered charities. Bona vacantia arises, in origin, by virtue of the Royal Prerogative and in some respects remains the position although the right to bona vacantia of the two major categories is now based on statute: Administration of Estates Act 1925 and the Companies Act 2006.
There are separate attorneys general for the estates. Generally the exemptions tend to follow the same line: any rights pertaining to the Crown in most areas of the country instead pertain to the Duke in the Duchy. Generally, any Act of Parliament relating to rights of this kind will specifically set out special exemptions for the two Duchies and specify the extent to which they apply. They are subject to strict regulation, especially with respect to auditing and alienation of land.

Holdings

The holdings of the Duchy are divided into six units called surveys, five rural and one urban. The rural surveys make up most of the assets and area but the urban survey generates a greater income. The holdings were accrued over time through marriage, inheritance, gift and confiscation, and in modern times by purchase and sale.
Revenue surplus or income from the Duchy of Lancaster has increased considerably over time. In 1952, the surplus was £100,000 a year. Almost 50 years later in 2000, the revenue surplus had increased to £5.8M. In 2010, the revenue surplus stood at £13.2M and by 2017, the surplus had grown to £19.2M.