LONDON, NOV. 26 -- Queen Elizabeth II, whose family's finances have stirred sharp debate, let it be known today that she will begin paying taxes and supporting some of her relatives out of her own deep pockets.
To stunned silence in the House of Commons, Prime Minister John Major announced that the queen told him weeks ago she wanted to explore "the basis on which she might voluntarily pay tax." Although details are still being negotiated, the queen is expected to begin paying income and other taxes in the tax year starting next April, Major said, adding that he believes the move "will be widely welcomed both by the House of Commons and beyond."
Prince Charles, who already donates 25 percent of his income from lands owned by the Duchy of Cornwall, wants to pay taxes on the same basis as the queen, officials said.
Major said the queen also has asked to trim the "civil list" -- public funds, amounting to about $15 million this year, that are paid to members of the royal family to finance their staffs and duties.
The queen, her husband, Prince Philip and the Queen Mother would continue to receive such payments. The queen's children who currently receive civil list funds -- Prince Andrew, Prince Edward and Princess Anne -- would be dropped, as would the queen's sister, Princess Margaret and elderly aunt Princess Alice. Since the queen receives the lion's share of the payments, the cuts would save only about $1.3 million a year.
The move comes amid an unprecedented public discussion of the royal family's finances and responsibilities. After Windsor Castle was severely damaged in a fire last week, the government sparked angry questioning about the queen's tax-exempt status by its quick announcement that it would pay an estimated $90 million to repair the structure. Why, newspaper editorials and opposition politicians demanded, should taxpayers foot the bill when the queen, often called the richest woman in the world, stubbornly refuses to pay any taxes at all?
Major said that the queen's offer to join the tax rolls was made last summer. Buckingham Palace sources said the offer was not announced sooner because time was needed to work out details, but the sources added that the latest public outcry helped prompt the decision to disclose it now.
Whatever the history, the reversal of the queen's long-held position that she is immune from taxation appeared designed to put an end to what the queen has called an "annus horribilis" -- Latin for a "horrible year." With considerable understatement, the queen said in a speech Tuesday that 1992 "is not a year that I shall look back upon with undiluted pleasure."
Her daughter, Princess Anne, was divorced, her son Prince Andrew became separated and Prince Andrew's estranged wife, the former Sarah Ferguson, was caught canoodling in the south of France with her American "financial adviser." The queen's son and heir, Prince Charles, was revealed to be trapped in an apparently loveless marriage with Princess Diana, who is so popular that she has become a kind of rival royal power center. Both Charles and Diana were caught overheating during high-temperature phone conversations with old flames. The blaze at Windsor Castle, the queen's favorite residence, seemed to add a finishing touch to the streak of royal mishaps.
The queen will almost certainly be charged at the top income tax rate of 40 percent. But before she can begin paying such taxes, officials must determine her income. Since Buckingham Palace has long declined to cooperate with any careful tally of her net worth, this task may not be easy.
Estimates of her wealth have ranged as high as 6.5 billion pounds -- about $10 billion at current exchange rates. But that amount includes the crown jewels, royal palaces and other items that she could not realistically sell, and her family says such figures are ludicrous.
"Absolute crap," Prince Edward said this week. "If only she had 6.5 billion."
Calculations based on the narrowest possible definition of the queen's private assets -- including one by the Economist magazine -- have come up with a figure of less than $100 million.
She earns interest and dividends on a sizable investment portfolio, but estimates of that portfolio's extent vary from $75 million to $700 million. Stock is not held in her name, but rather by a company called Bank of England Nominees, according to the Times of London.
The queen also receives about $5 million a year in income from lands held by the Duchy of Lancaster, and she uses those funds to pay expenses not covered by civil list payments. This income also would become taxable.
The queen owns enormous estates at Sandringham and at Balmoral, Scotland, and presumably would have to pay a local levy called the council tax on these properties, just as any other homeowner does. The status of Windsor Castle, Buckingham Palace and other royal residences is a bit more clouded: They are owned by "the crown," officials say, not by the queen. But the queen is the personification of the crown.
The queen's offer made no mention of inheritance taxes. Her ancestors have left her priceless artworks and artifacts, including a painting by the Dutch 17th century artist Jan Vermeer and a set of drawings by the Italian Renaissance master Leonardo da Vinci. The value of her art collection has been estimated at $350 million to several billion dollars.
For a British monarch to pay taxes would be nothing new. Kings and queens have historically paid their share, subject to negotiation with the government. For example, King George III, the monarch at the time of the American Revolution, pioneered the idea here of surrendering income from vast crown lands in exchange for some tax relief, an arrangement that persists to this day. Later monarchs, such as Queen Victoria, dutifully paid income taxes.
Victoria's descendants, however, quickly began to look for loopholes. It was Elizabeth's father, George VI, who finally won complete tax-exempt status. Just how he managed this feat is not known because details of any agreement made at the time are secret.
Supporters of the royal family argue that the issue has been overblown, since the queen's donation to the Treasury from crown lands amounted this year to nearly $100 million. They contrast that figure with the $85 million paid by the government to the royal family and for upkeep of facilities such as the royal trains and yacht.