How do the British royal family finance themselves?

Just to add to and clarify this answer, Her Majesty also receives payment (Though minimal) through the Duchy of Lancaster which funds various Royal expenses and pays a small amount to other members of the Royal Family, with the exception of The Duke of Edinbrough, who as a Prince of Denmark and Greece, trust me, already has enough to take care of himself!

The Civil List provides mostly for the expenses that Her Majesty carries out as Head of State. As such, when Her Majesty hosts a State Dinner for, oh, say the President of France, who is on a State Visit, the expenses are paid out by the Civil List. However, if Her Majesty simply had a few friends over for dinner, these expenses would come out of her own pocket. And don’t kid yourself; Her Majesty has DEEP pockets with out any help from the Civil List.

The Prince of Wales himself actually has little (at least, comparatively speaking royally) in way of disposable funds. As a matter of fact, he had to borrow money from Her Majesty to meet his obligations after his divorce to Diana, Princess of Wales.

The Civil List was created in 1760 as an agreement between the Crown and the Government. This arranges for the Crown to hand over most income of “Crown estates” This can be officially acknowledged as the beginning of the difference between “Crown Property” as in what the Monarch personally owns, and “Crown Property” as in what the “Crown” owns. (This showing that there is a difference between “The Crown” as a symbol and the person who wears the Crown as a person)

While it is a bone of contention with many people not only in the U.K., but also those of us in the Commonwealth Realms (Mistakenly believing that citizens of the Commonwealth Realms have to support the Monarchy directly) the monies received from the Civil List are really just payment for the Government and People being allowed to use lands and resources that by all rights should belong to the Royal Family. To suggest otherwise is NO different that suggesting that the Kennedy’s should have to give back their fortune because it was largely gained by Bootlegging.

And just as a point of being clear, HRH Prince William is NOT a “Prince of Wales”. He IS known as HRH Prince William *of* Wales, but the title Prince of Wales can only be held by one person at a time, and is always the eldest son of the reigning Monarch. Thusly to refer to HRH Prince William as “HRH Prince William, Prince of Wales” is utterly incorrect.