A centuries-old private estate that functions to provide income to the Queen, has a modern-day image issue now that some investments have been made public.
A massive number of documents revealed by a group of investigative reporters, known as the “Paradise Papers,” includes information about the investments made by the Duchy of Lancaster. According to an article from CNN Money, “Queen's estate invested $13 million in offshore tax havens,” the BBC (British Broadcasting Corporation) reports having seen documents that show that more than $13.1 million has been invested into offshore funds in the Cayman Islands and Bermuda.
The Queen hasn’t been accused of any wrongdoing. However, these investments are a bit of an embarrassment for a royal family that closely guards its sterling reputation.
"We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimate," the Duchy of Lancaster said in a statement.
The Duchy noted that the Queen, who’s officially exempt from British tax laws, "voluntarily pays tax" on income she receives from the estate.
The $680 million Duchy, which provides her with an income to cover official expenses, says it invests primarily in commercial, agricultural, and residential properties. The Duchy generated $25 million in net income in the most recent fiscal year, but one of its offshore investments has created some controversy.
One investment, in particular, has raised eyebrows. According to the BBC, the Duchy invested $7.5 million in an offshore fund that invested in medical and tech companies and then later invested in BrightHouse, a U.K. retailer. While the Duchy said its investment in BrightHouse is worth only $4200, BrightHouse was found to be an irresponsible lender, giving customers credit to buy home furniture and appliances and being taken to task by the U.K.'s Financial Conduct Authority for poor practices.
The Duchy issued an apology. However, it should be noted that it is very unlikely that the Queen knows how her money has been invested. In that way, she’s like many who have a pension and just don’t know how their money has been invested.
Reference: CNN Money (November 6, 2017) “Queen's estate invested $13 million in offshore tax havens”