Royal Legacy: How the royal family have made, spent and passed on their wealth

by McClure, David

  A heavy smoker, Princess Margaret had long suffered from respiratory diseases and had part of her lung removed in 1985. Although she was forced to give up smoking late in life, the long-term effect of her nicotine habit may well have contributed to the final stroke that killed her in February 2002. She was far from being the first royal to die partly as a result of smoking and indeed, a strong case can be made that the last four British kings all died of smoking related complaints. Her father, George VI, died of lung cancer in 1952 after decades of heavy smoking. Her uncle, Edward VIII, died of throat cancer after smoking from a young age. The tobacco habit of her grandfather, George V, may have played a big part in the bronchitis, emphysema and chronic obstructive lung disease that led to his premature death in 1936. Edward VII too suffered from bronchitis - exacerbated by twenty cigarettes and twelve cigars a day before he died of a heart attack. Queen Mary smoked and encouraged her son George VI’s smoking by giving him a cigarette case on his 18th birthday (Margaret's own gift collection - as shown from a single auction - numbers over fifty cigarette cases, holders and lighters, not to mention a dozen snuff boxes). Even the elegant Princess Marina was said to be inseparable from her Russian cigarettes (although it was not a factor in her early death), whereas Prince Philip only agreed to give up smoking on his wedding day. The Windsors' attachment to the weed is illuminated in a telling family photo taken at Balmoral in October 1945 which shows the fifteen-year-old Princess Margaret with a cigarette in her fingers, while her father George VI sits nearby with a teacup in one hand and a cigarette in the other.

  Princess Margaret left precise instructions for her funeral service. Whether this was laid out in her will or in a separate memorandum attached to her last testament is not known. What is clear is that she gave considerable thought to every detail of the ceremony which she wanted in St George's Chapel, Windsor. She specified that it should be a private service for family and friends. On the day, the four hundred and fifty mourners featured almost every member of the royal family as well as a host of show business acquaintances which included Cleo Laine, Bryan Forbes, Maggie Smith and Judi Dench. As a reminder of her love of ballet, Tchaikovsky's Swan Lake was played on the organ in a prelude to the service. This was followed by music by William Croft and the choir singing Psalm 23. Later after a lesson from Romans 8, the congregation sang two of her favourite traditional hymns "Immortal, invisible, God only wise" and "When I survey the wondrous cross.” Seated among the congregation was her centenarian mother, the Queen Mother, who was determined to attend despite her extreme frailty and the memories that the occasion prompted. Exactly fifty years ago to the day she had been in the same chapel for her husband's funeral. It would be the last time she was seen in public before her own death six weeks later.

  True to her individualistic character, Margaret chose to go against royal tradition and be cremated rather than buried. This made her - according to one biographer - the "first senior royal since the dark ages" to be to be cremated, her only rival being the relatively minor Windsor Princess Louise who was cremated in 1939. According to another biographer, her decision was in part influenced by her distaste for the royal family's private burial ground at Frogmore in Windsor Park which she always found "gloomy" and in part from a desire to be interred next to her beloved father in the King George VI memorial chapel. As a result, for a fee of £280 her body was turned to ashes in the anonymous setting of the municipal crematorium at Slough.

  Meanwhile, in Farrers' law chambers overlooking Lincoln’s Inn solicitors acting for her estate began to take steps both to prove her will and to prevent it from being made available for public inspection. It is not known whether the application to seal her will was made immediately after her death but it is likely that there would have been some delay since this request would have been linked to the application for probate which would have required some time to prepare a full inventory of her assets. This can often be a painstaking task as we know from the account of the royal butler Paul Burrell. After the death of Princess Diana, a team of valuers from leading jewellers including Asprey’s had to be brought in to put a price on her jewellery collection.

  We do know for certain that the application relating to her will was granted on 17 June 2002 and probate on 24 June. Although the contents of the will were kept secret, probate details are available for public inspection. They reveal that she left a gross estate of £7,700,176 and a net estate (after liabilities had been paid) of £7,603,596.

  When this seven figure sum was first made public, many in the media suspected that it represented the tip of an iceberg. The Daily Mail suggested “it is likely to have been only a fraction of her true personal wealth."6 Just one year earlier, its sister paper The Mail on Sunday had published a wide-ranging investigation into the wealth of the House of Windsor which ranked Margaret as the 11th richest royal (the Queen was top followed by Prince Charles, Earl Harewood and the Queen Mother) with a personal fortune of £20 million.7 So - if this figure is in any way correct - what happened to the missing £12.4 million?

  There is an element of guesswork about all valuations of the very wealthy - whether it is the Mail on Sunday's Royal Rich Report or the Sunday Times's annual and less regal Rich List. With no access to their personal tax returns or bank account details, valuers are left to speculate about the size of their assets. But when it comes to the royal family some of their assets – most notably their jewellery - are on public view and thus easier to value. Compared to her sister Margaret had a small jewel box, since traditionally the most important items are passed from sovereign to sovereign rather than to the sovereign's younger sibling. Nevertheless Margaret inherited a few particularly fine pieces thanks to the generosity of her grandmother, Queen Mary, who had some valuable gems left over after leaving the bulk of her estate to Queen Elizabeth. The most expensive gift from the “rock of the family” was a large sapphire surrounded by diamonds which had once belonged to the Russian Tsarina and which was valued at £495,000.8

  Some of her jewellery was acquired through gifts on state visits. The most lucrative destination by far was South Africa which she visited in 1947 with the King, Queen and Princess Elizabeth and again in 1953 accompanied by her recently widowed mother. After a tour of the Kimberley diamond mines she was given a 4.5 carat blue-white emerald-cut diamond set in a ring - which today would be worth tens of thousands of pounds.

  The value of some of her most precious items only came to light through the Christie’s auction of her chattels in 2006: a ruby and diamond ring went for £299,200; the Queen Mary Diamond Riviere - bequeathed by her grandmother - was valued at £200,000 but on the day commanded £993,600; and the Poltimore Tiara which was bought for her wedding fetched £926,400.9

  The auction records also reveal that Margaret possessed some valuable furniture and household items. One clock commanded £1,240,000 but it was no ordinary timepiece since Christie’s catalogued it as a jewelled, gold mounted guilloche enamelled silver clock marked Fabergé. As can clearly be seen from the catalogue’s provenance records, Princess Margaret inherited much furniture from Queen Mary - with one of the most valuable items being a chair used by her grandmother for the 1937 coronation which fetched £38,000 and which could be set in front of the Queen Mary mahogany display cabinet worth £19,200.

  Margaret’s art work is harder to value as much of it has been kept discreetly in the family rather than put up for auction. Her extensive art collection, according to some press reports, included paintings by John Piper, Patrick Procktor, Robert Heindel and Jean Cocteau, as well as highly collectable sketches by Oliver Messel and water colours by Bryan Organ. We know for certain that she owned the famous portrait of her by Pietro Annigoni since it was put up for auction and fetched £680,000. A portrait of her aged four in a pink bonnet from the less famous artist Frank Owen Salisbury realised £8,400, while a set of Picasso lithographs fetched £20,400 and a Russian icon £26,400. All in all, the Christie’s sale of her furniture and artwork (as well as some silver)
brought in £4,052,408.

  We saw earlier how her sister, the Queen, received a small fortune in wedding gifts and she too benefited from a windfall on her marriage. One estimate puts their worth at a staggering £3m but when you take into account that the Snowdons reportedly received over two thousand presents that figure might not be too wide of the mark.10 Of course many items - such as gifts from staff at Balmoral or from small Caribbean states - were worth only modest sums (less than £1,000), but some other items were of considerable value. A wedding present from the army - a 19th century mahogany dining table – was later sold for £18,000. The governments of old Commonwealth countries could be even more generous. For instance, a pair of silver kiwis from the government of New Zealand was auctioned for £36,000 while a set of gold presentation candlesticks from the government of South Africa brought in £31,200.

  In September 1942 she received a surprise present when the society hostess Dame Margaret Greville left her a cash bequest of £20,000, a sizable sum for a twelve-year-old. But her biggest inheritance came a decade later in 1952 with the death of her father, George VI. The contents of his will remain secret but he would almost certainly have left her money - probably in the form of a trust fund. We know from letters dated as early as 1938 to his brother-in-law Sir David Bowes-Lyon, a director at Lazards Bank, that he wanted to use the surplus from his Civil List payments to establish an investment fund for his two daughters. According to Margaret’s biographer Christopher Warwick on her 21st birthday she had access to such a trust fund at Coutts Bank. It is very possible that she also received a trust income from her grandfather, George V, since he is known to have spoken of the need to make savings from his Civil List income in order to provide for his grandchildren.

  During her lifetime she also received valuable heirlooms from her parents. These were often given at important rites of passage such as key birthdays or Christmas. At an early birthday - probably her 2nd or 3rd - her mother gave her an antique diamond rose brooch worth £42,000 which was later augmented by an antique diamond and gem set bee brooch (valued at £33,600) that been her mother’s own christening present and one of the first jewels she ever owned. For her 21st birthday her mother presented her with a valuable set of Persian turquoises. Her father George VI gave her a diamond gem set brooch (£38,000) round the time of her 8th birthday and at Christmas 1949 a gem set gold cigarette case bearing an inscription from Papa GR. It was later sold for £102,000. We also know that he gave her for her 21st birthday a diamond Colet necklace the precise value of which is unknown but likely to be in five or six figures.

  The next big inheritance came a year later in 1953 with the death of Queen Mary. Again, the precise contents of the will are a mystery but the Christie’s catalogue with its provenance records does reveal the extent and value of the items transferred from grandmother to granddaughter. As we have seen earlier, many of these took the form of valuable furniture but as one would have expected from one of the world’s greatest collectors of gems, there were many items of jewellery. It is more than possible that many valuable heirlooms were also transferred before her death.

  Yet despite this veritable waterfall of wealth, the two women were rumoured to dislike each other intensely. This was certainly the case in later life. Princess Margaret is known to have told her friend and biographer Christopher Warwick that they did not get on and that her grandmother was jealous of her more impressive royal lineage. The two princesses were daughters of a king, while the queen consort had merely married one. Some biographers have stated that Mary regarded her granddaughter as "spoiled" and unduly short. Margaret was just five foot one inch’s tall and the towering five foot six inch Mary once tactlessly asked "When are you going to grow?" The patrician writer Nancy Mitford liked to refer to Margaret as the “royal dwarf."

  When assessing the princess's wealth it is worth while considering whether she might have saved money from her Civil List annuities. In theory these were just payments to cover the expenses solely incurred in carrying out official royal duties, but in practice - as George V and Edward VII showed - it was possible in a good year to save from the allowances. After reaching twenty-one in 1952 she received a Civil List annuity of £6,000. A decade later this rose to £21,000 on her marriage to Anthony Armstrong-Jones. Clearly such state income was important to maintaining her lifestyle and some royal chroniclers have speculated whether it might have been a factor in her decision not to marry Group Captain Peter Townsend in 1955, after a year of frenzied rumours about an imminent wedding. In October Anthony Eden’s government decided it could not justify spending taxpayers’ money subsidising the household of Margaret and her divorced husband and his two children. If Margaret married she would have to renounce her royal status and with it her Civil List payments. The royal commentator Robert Lacey has pointed out that within four days of the Queen passing on the bad news, Margaret decided to give up Townsend.11

  The Civil List payments continued and after the 1970-71 review, parliament granted her an uplift to £35,000 much to the ire of Willie Hamilton MP who branded her "an expensive kept woman" and a "monstrous charge on the public purse." But in 1993 her name was removed from the Civil List after a major reorganization of royal finances and she had to rely on the Queen for an annual payment of £219,000 for costs incurred carrying out her official duties.

  During the four decades when she was on the Civil List she enjoyed considerable tax privileges. The expenses of all ordinary citizens are liable to tax but as was revealed in the chapter on the Civil List review Princess Margaret (as well as the Queen Mother) was allowed 100% tax relief on their royal annuities. Other less senior members of the royal family were only granted 90% or 80% tax relief – depending on the extent of their royal duties. It was a generous view to take that her annuity was fully used for official expenses. After her marriage to Lord Snowdon, she also benefited from public funds to the tune of £80,000 in the renovation of her private Kensington Palace apartment. It was turned into a grand London house complete with a dog washing room, a sun bed room and – according to some reports - a Christmas present wrapping room.

  The one asset missing from her estate is any landed property. She never bought a country house and her grace-and-favour apartment at 1A Clock Court in Kensington Palace was rent-free. The only house that was ever owned in her own name was overseas - Les Jolies Eaux on Mustique. Princess Margaret first visited the small Caribbean island in 1960 while on a honeymoon cruise with Lord Snowdon. She arrived on the invitation of an old friend and suitor, Colin Tennant (the future Lord Glenconner) who had bought the island for a mere £45,000 in 1959 after selling a property in Florida (his wife thought he was crazy to acquire this barren patch of wilderness). Later - when he was Lord Glenconner - he sold the island at enormous profit. Some more cynical observers have suggested that he used his royal friends and other famous acquaintances to get publicity for the island in order to boost land values.

  Colin Tennant who died in 2010 told a different story: "When I learnt of her engagement I asked her if she would like something wrapped in a box from Asprey's or a lot of land on Mustique. She was obviously submerged by little wrapped boxes from Asprey's. So she chose the land.”12 Although it was a wedding present, it was given to Princess Margaret alone rather than the couple together. When Lord Snowdon was later asked to comment on this, all he would say was reportedly "odd, don't you think?”13

  A few years later Princess Margaret asked Tennant to build a house on the land. Designed by Oliver Messel, Snowdon's uncle, and financed by the princess and probably Tennant as well, Les Jolies Eaux was not completed until November 1972. It soon became her private playground - off limits to Lord Snowdon who according to some reports never returned after the honeymoon visit.

  This story of the Mustique property took a surprising turn on 3 November 1988 when she transferred it to Lord Linley on his birthday. Why would a fifty-seven-year-old princess dispose of her most prized possession to her twenty-seven-year-old son? When in 1999 he
sold the house to James Murray, an American telecommunications tycoon, for a reported sum of £1.5m and bought a cheaper villa in the south of France, she was according to some reports plunged into depression. Although it could not have come as too much of a surprise as the property had been on the market for over a year.

  The transfer of the Mustique villa provides a clue to the mystery of what happened to her missing millions. Princess Margaret was known for her forward thinking (her friend Jocelyn Stevens remarked on how she even planned ever last detail of her holiday itinerary)14 and more than likely she applied this planning habit to preparing for her death and the effects of inheritance tax. As someone who was also financially astute, she must have been well aware that if she waited until within seven years of her death, any transfer of her assets would have been subject to inheritance tax as a chargeable lifetime transfer. So by transferring the property in 1988 rather than 1999, she would have saved her estate a large tax bill.

  Although she was denied the full constitutional education granted to her sister (an error, incidentally, not repeated by the Queen who pays for special tuition for Prince William) Margaret was without doubt very clever. Gore Vidal, the author and a friend for forty years, recognised a kindred spirit in his memoirs - “she is far too intelligent for her station in life. She often had a bad press, the usual fate of wits in society…but one can note her kindness to friends, to those employees whose pensions she paid out of fairly meagre resources.”15 When it came to her own personal finances, she had shown an interest in prudence from an early age. When on her ninth birthday she received some little notebooks she decided to keep one especially for money since her father was going to give her sixpence a week.16 Later in life she was notoriously careful ensuring wherever possible that her expenses were met by other means. She reportedly once admitted to an acquaintance "we never pay the full retail price of anything."17 One anonymous former member of staff was quoted as saying "she was the embodiment of the old maxim 'take care of the pennies and the pounds will take care of themselves'. She was not mean exactly but she was certainly very careful.”