For the past 250 years, Britain's method of funding the monarchy has
been based on a delicate 18th-century trade-off in which King George
III agreed to hand over the income from the Crown Estate – property
and land acquired by the crown since William the Conqueror's day – in
exchange for a fixed annual payment from the Treasury.
At the time, it
was a good deal for George: he had no money and the estate brought in
very little. But these days it brings in far more than the state pays
out on the royals: last year its £7.3bn portfolio – from beef farms in
the north of Scotland to swathes of Regent Street in London's West End
– provided about £230m of income to the Treasury.
[Source]
Royal funding changes:
The Sovereign Grant Bill introduces a single payment given to the
monarch based on 15% of the Crown Estate's revenue from two years
previously.
Starting from 2013-14, this funding arrangement will last seven years before it is reviewed.
The grant is expected to be £34m in the first year
Tourism Revenue
The BBC reported in 2010 that:
Overseas tourists spent more than £500 million visiting attractions
associated with the history of the Royal family last year.
That figure comes from a report by VisitBritain.
Cost of the Royal Family
From the BBC (2009):
The total cost to the public of keeping the monarchy increased by
£1.5m to £41.5 million in the 2008/9 financial year.
But according to Republic:
The official figure excludes a number of costs, including
round-the-clock security, lavish royal visits and lost revenue from
the Duchies of Lancaster and Cornwall.
The estimated total annual cost of the monarchy to taxpayers is £202.4 million, around five times the official figure published by the royal household.
The Tax Payer Treasure Hunt agrees that the official "£40 million" figure does not include all costs:
With the added cost of royal security estimated at £50 million, the total cost of the British monarchy is about £90 million.
