She would undoubtedly have taken advice on inheritance planning. If she gifted her Mustique property to her son on his 27th birthday, then presumably for reasons of family fairness she would have made some similar transfer to her daughter. Lady Sarah Chatto studied at the Camberwell School of Art and as a professional painter she may possibly have received some of the art work that her mother bequeathed from Queen Mary but which was noticeably absent from the Christie’s sale. According to Leslie Field in her study of royal jewellery, she received from her mother a string of turquoise and pearl beads that she had been given as child.18
If Margaret had indeed done this then she would only have been following a pattern of behaviour established by her own parents and grandparents. It soon becomes apparent that the master planners of the House of Windsor like to transfer wealth not on their deathbed but much earlier during their lifetime when it is not be subject to death duties. If you examine closely the Christie’s catalogue, you can see how birthday, Christmas and even confirmation presents were used as a transmission belt for wealth transfer. The benefit of the auction list is that not only does it identify what Margaret owned but it also gives a monetary value to those possessions and in many cases a clear line of provenance. If you limit the analysis to just birthday, Christmas and confirmation presents in the first twenty-one years of her life and further restrict it to a single donor - her grandmother, Queen Mary - the inventory provides a fascinating insight into how the wealth was passed from generation to generation by stealth.
The cornucopia of presents began on her first birthday when she received the first of twelve George V, Edward VIII and George VI candle holders dated 21 August 1931 and so on that were given each year until she reached the age of twelve. Although not the most practical present for a newborn, they brought in £18,000 at auction for her own children. Her second birthday present was no more suitable for a toddler - a ruby cultured pearl necklace (worth £27,600), nor was the additional gift of a French painted fan (£28,800) with the accompanying note explaining that the fan had been given to her in 1932 by Queen Mary having previously belonged to Queen Alexandra.
On her ninth birthday she received another chain gift that continued over several years - an Edward VIII and George V silver nine piece tea and coffee service worth £28,800 with the note from her grandmother explaining that she was giving her parts of a tea service by degrees for birthdays and Christmas.
The idea of "giving by degrees" is a perfect description of Queen Mary’s method of transferring her wealth. Sometime around Margaret’s ninth birthday, the old queen also gave her a Honiton lace fan (worth £14,400). For her fifteenth birthday, her grandmother gave her furniture in the form of a French walnut and gilt brass mounted miniature vitrine (worth £20,400). In the same year the Archbishop of Canterbury confirmed her into the Church of England which triggered more gifts from grandmama - including a set of George V silver-gilt mounted mother-of-pearl fruit knives and forks (£312,000) and an art deco sapphire brooch (£66,000). On her eighteenth birthday, she received from Mary an art deco pearl and diamond necklace (£276,800) that became one of her favourite pieces of jewellery. In the same year for Christmas she received a mahogany fire screen (£18,000).
In total Princess Margaret received by the age of twenty-one around £800,000 worth of gifts from her grandmother from birthday, Christmas and confirmation presents. This total at 2006 prices represents only the gifts we know about from the Christie’s sale and the real figure is likely to be much larger. The total does not include the Fabergé clock worth £1m that was gifted at some unknown date. One might ask what the hurry was as the twenty-one-year-old had another half century of life ahead of her. But the donor - then eighty-four - must have felt that time was running out and indeed she would be dead within two years of her granddaughter's birthday party. Although it was normal practice for members of the royal family or peerage to pass on family heirlooms at important rites of passage, the sheer scale of the transfers went beyond normal aristocratic practice and suggests the possibility of some element of inheritance planning at work.
In planning her own estate, Princess Margaret would in all likelihood have consulted Lord (Nigel) Napier, her private secretary and comptroller between 1973 and 1998 and her treasurer from 1992 until her death. A friend of the royal family and a quintessential safe pair of hands, Napier was appointed co-executor of her estate along with William Sackville, the Earl of de La Warr, who had a background of stockbroking in the City. The third executor was Sir John Grenfell Nutting QC, a barrister and deputy high court judge who married one of the princess's friends (later in 2002 he would also advise the executors of Princess Diana's estate during the trial of Paul Burrell). If Sir John provided the legal expertise, Earl de la Warr the financial nous and Lord Napier the personal connections, what united the three was that they were all products of Eton.
The last mystery surrounding Margaret’s estate is who were the beneficiaries of her secret will. In her heyday in the sixties and seventies, she had a wide circle of show business friends and her active social life - including the well-publicized affair with Roddy Llewellyn as well as her earlier aborted engagement to Group Captain Peter Townsend prompted gossip of illegitimate offspring. Would she have left any mementos to Roddy who was present at the funeral along with Lord Snowdon who after the divorce remained on friendly terms with her and might have been remembered in her will (his biographer revealed that his valuable collection of cufflinks for some reason remained in her safe which was not cleared out until her death)? Presumably there would have been some bequests to her three executors in recognition of their past friendship and future work for the estate.
Immediately after her death, it was widely rumoured in the press that she left everything to her children. The picture became slightly clearer when following the grant of probate in June 2002 a spokesman for Viscount Linley briefed the media. He confirmed that the bulk of the estate went to Lord Linley and Lady Sarah, apart from personal bequests (these, according to Buckingham Palace, were to friends and former members of staff). No further details of the will would be made public although it was made clear that the Queen was not a beneficiary.
12.FROM QUEEN MOTHER TO DAUGHTER - 2002
“A marsh-mallow made on a welding machine”
Cecil Beaton on the Queen Mother
The Queen Mother's appearance at the funeral of Princess Margaret on 15 February 2002 would be her final public engagement. The centenarian consort retreated to the Royal Lodge at Windsor where her increasing frailty raised doubts about whether she would be able to take part in the Golden Jubilee celebration in June. She suffered a number of falls injuring her arm and ultimately making her bedbound. She was able to make a few farewell telephone calls - including one to Princess Anne and another to her racing manager, Michael Oswald. By Good Friday, March 29, she was so frail she could barely lift her head from the pillow.1 The next day her condition took a turn for the worse. The Queen, Lord Linley and Lady Sarah Chatto were called to her bedside and she died at 3.15 pm.
The Palace announced the news two and half hours later and by 5.50 pm it was across all the television channels. This time it was not the colourful flashing graphics of Sky News that grabbed the attention but one BBC newsreader’s purple tie. As BBC-1 cleared the schedules for the breaking news, it was noted that despite the decades of preparation for this event its veteran newsreader Peter Sissons was not wearing a black tie. The tabloid newspapers led by the Sun accused him of being insensitive and the story rumbled on for days before the palace issued a statement that they had had no complaints about the BBC's coverage. In fact, ITN's newsreader at the time, Nicholas Owen, had also forsworn a black tie for a dark blue one which unlike Sissons’s burgundy item appeared black on TV screens. But regardless of the real colour the hue and cry in the popular press illustrated how volatile was the public mood.
Her death may not have come as a surprise but the public outpouring of grief and affection did. At first it was r
ather muted as the crowds failed to materialize for the lying-in-state in Westminster Hall. But over the week as the weather turned unseasonably chilly the mood changed and by Monday evening one hundred and seventy thousand people had braved the plummeting temperatures to file past her coffin. The interest was now so great that the hall had to remain open until 6 am the next morning – an echo of Edward VII’s lying-in-state. One of the officers standing guard during the week of mourning was Captain James Blunt of the Life Guards, who three years later would find worldwide fame as the singer/songwriter of the smash hit "You’re Beautiful."
The funeral was held on the morning of Tuesday 9 April in nearby Westminster Abbey. Among the two thousand and one hundred mourners - well away from the heads of state, prime minister Tony Blair and all the senior members of the royal family assembled in the front row - at the back sat William ("Backstairs Billie”) Tallon who had served as the Queen Mother's valet for forty years. The former equerry Colin Burgess lamented how sad it was to see people like Tallon who had devoted his life to the Queen Mother being left out of the main proceedings.2 Some people - among them, according to Burgess, the Duke of Edinburgh - thought he should have been accorded a more prominent place, but he was hidden at the back, obviously distraught.
After a flyover down the Mall by two Spitfires and a Lancaster bomber, the hearse containing her coffin arrived late that afternoon at Windsor for its final resting place. The delay was caused not just because it avoided the M4 as the Queen Mother had always insisted in her lifetime but also because it had to slow down to accommodate the crowds of up to one million people who lined the route. Once the corpse had been embalmed, the coffin was taken into the King George VI Memorial Chapel and laid to rest next to the old king. Later, a casket containing the ashes of Princess Margaret was deposited in the tomb so that mother, father and daughter were united at death.
As we have seen in the case of Princess Margaret's death, lawyers for the Queen Mother had already begun the process to seal her will either before or at the time she passed away. Consequently when some time after March 30 an application to seal her will and grant probate was put before the president of the Family Division he could refer to the blanket direction on royal wills rather than assess the matter purely on its own merits as would be the case with any ordinary citizen. This would clearly expedite the process. But when one looks closely at the timeline of events following the death, it is evident that the process was completed with unprecedented speed. On April 10 - just sixteen days after her death - the application to seal her will was granted. Then on April 15 probate was granted. We know from a later appeal court judgment that the Attorney General – possibly acting in his capacity as representative of the public interest - "was joined as defendant to each application."
Normally, once the application has been lodged, it takes a few months for probate to be granted. In the case of Princess Margaret there was a gap of eighteen weeks between her death and probate being granted. Even allowing for the fact that there was no tax to pay which might have excused her executors from doing a detailed inventory of her assets, she still had an estimated £7 million worth of debts to deduct from the gross value of her assets. So, how could all this have been accomplished within nine working days of her death?
The most likely explanation is that probate went through almost automatically and that the whole process at the Family Division may have been little more than a legal rubber stamp or a formality. Indeed, it is rather surprising that probate was even applied for since it is customary for probate not to be required for sovereigns - although whether this applied to consorts of sovereigns is unclear. In the case of the last consort to die - Queen Mary in 1953 - probate was granted and her estate openly valued at £406,407 9s 8d. When it came to the Queen Mother no probate figure was recorded. So there appears to be little consistency in this area. Presumably the granting of probate amounted to no more than proving the will and giving authority to her executors to dispose of her assets, rather than the normal process of making an inventory of all the assets and liabilities (and if necessary, paying any inheritance tax). In practical terms there is little way that the Queen Mother's vast estate could have been valued in under a fortnight.
Princess Margaret died seven weeks before her mother and yet her probate was granted almost eleven weeks after her mother's (June 24 compared to April 15). Why did it take four months longer to complete her probate? A clue to solving the mystery may lie in tax. Princess Margaret's estate was liable to inheritance tax at 40% (after the first £250,000 tax-free allowance) and as such a detailed inventory of all her assets and liabilities had to be drawn up. Since there was no tax to pay on the Queen Mother's estate, one can assume that it was deemed unnecessary to draw up a list.
But why was the Queen Mother's estate exempted from inheritance tax in the first place? The convention dated back a mere decade to an agreement between Queen Elizabeth and her prime minister John Major reached at Balmoral in September 1992. In the early 1990s - when the country braved the worst recession since the thirties - the palace had faced a storm of criticism about its privileged financial situation. The Queen's tax exemption on private income was singled out for attack in Phillip Hall's influential 1992 book “Royal Fortune: Tax, Money and the Monarchy” which formed the basis for a subsequent television investigation by the ITV "World in Action" programme. Hall uncovered that earlier monarchs including George V had actually paid income tax. Editorials in the Sunday Times censored younger royals for using their Civil List payments to finance their lavish lifestyles and an opinion poll in 1991 revealed that 90% of the population thought the Queen should pay tax. The time was thus ripe to clean out the royal stables. On the urging of Prince Charles who had begun to style himself as a moderniser of the monarchy, Michael Peat, the royal household's director of finance and a former partner of a leading accountancy firm Peat Marwick McLintock (today KPMG), was enlisted to devise a new fiscal framework. The royal finances were part of KPMG’s DNA. Peat’s great-grandfather had founded the firm that audited the sovereign’s Privy Purse and as a young man he had helped his father in going through the books of the Queen’s private funds.
Over the course of the year Peat’s team of advisors were in discussions with the Treasury about whether the Queen should pay tax. The earlier reorganisation of the royal household expenditure by Peat’s accountants had taken away one of the traditional objections – the Queen could not afford to pay tax. Thanks to the palace cost-cutting, Her Majesty’s finances were now on a much firmer footing. Ironically the one person who had serious doubts over the tax reform was the prime minister himself. John Major later told the Queen’s biographer Robert Hardman that he did not require the Queen to pay tax.3 A palace official told another royal biographer that John Major‘s team were not at all keen about the measure since it would give the impression that they had all turned republican.4 But the palace took the view – helped by private polling evidence - that there was genuine public hostility to the tax exemption and that the only way to dampen the media firestorm would be to agree to pay tax.5
On 11 February 1993 - following a brief statement to parliament by the prime minister - the new arrangement was announced in full at a press briefing by the Lord Chamberlain, Lord Airlie, and later on live television news by Michael Peat. The headline story was that the Queen and the Prince of Wales had agreed to pay income tax and capital gains tax on their private income, although this would be done on a voluntary basis. The Civil List was also reduced to just two royals (the Queen Mother and the Duke of Edinburgh) while the previous recipients (Prince Andrew, Prince Edward, Princess Anne, Princess Margaret and Princess Alice) would have their annuity paid by the Queen.
When the Queen Mother was told of this major tax reform, she was far from pleased. After Sir Robert Fellowes, the Queen's private secretary, had spelt out all the details, she paused to consider their significance and then declared that she thought this might be a good moment to have a drink.6 She ordered a Marti
ni. What worried her most - according to members of the royal family - was that the new agreement amounted to a tacit acceptance that the Queen and more particularly George VI should have paid tax earlier. Although the Queen Mother took a carefree attitude to her personal finances, she was remarkably sensitive to general questions of taxation.
The deal, however, included one key tax advantage for the royal family: there would be an exemption on inheritance tax on any bequest from the sovereign to sovereign. This major concession - which according to Prince Charles's biographer caused "a serious difficulty" in the negotiations between the palace and the Treasury7 - received relatively little publicity, although the Queen's own biographer described it as "crucial” to the survival of the royal family’s way of life.8
Earlier, in the House of Commons John Major had explained that the exemption was to stop royal assets from being "salami-sliced away by capital taxation through generations, thus changing the nature of the institution in a way that few people in this country would welcome." There was a real danger in his opinion that the wealth of the monarchy could be decimated by a succession of premature deaths.
Royal Legacy: How the royal family have made, spent and passed on their wealth Page 22