As the Lancaster inheritance, the estate dates to 1265, when Henry III granted his younger son, Edmund Crouchback, lands forfeited by Simon de Montfort, Earl of Leicester.

[7] Edward III raised Lancashire into a county palatine in 1351, and the holder, Henry of Grosmont, Edmund's grandson, was created Duke of Lancaster.

[7] After his death a charter of 1362 conferred the dukedom on his son-in-law John of Gaunt, Earl of Lancaster, and the heirs male of his body lawfully begotten forever.

[7] In 1399 the Duchy of Lancaster, held by John of Gaunt's son Henry of Bolingbroke, merged with the crown on his appropriation of the throne (after the dispossession from Richard II).

His first act as Henry IV was to declare that the Lancastrian inheritance be held separately from the other possessions of the Crown and should descend to male heirs.

When George III surrendered his income from Crown lands in exchange for the Civil List, the Duchy of Lancaster was not mentioned at all as it was bankrupt for most of the century, due to previous monarchs selling its assets or granting leases for political favours.

[11] Parliament debated the two duchies' ownership multiple times, including when Queen Victoria and King Edward VII ascended the throne, respectively.

[12][13] In 2017, the Paradise Papers revealed that the duchy held investments in two offshore financial centres, the Cayman Islands and Bermuda.

[21] Its land holdings are not to be confused with the Crown Estate, whose revenues have been handed to the Treasury since the 18th century in exchange for the receipt of a yearly payment.

[23] Since the Local Government Act 1972, the monarch in right of the duchy appoints the high sheriffs and lords lieutenant in Greater Manchester, Merseyside and Lancashire.

Critics, including Edward Leigh and Margaret Hodge, called for the royal duchies to pay corporation tax and condemned the monarchy for profiting from public services.

The investigation also highlighted fees charged for military training and mooring rights on royal properties, with both duchies asserting they operated as commercial entities in compliance with disclosure requirements while emphasizing commitments to sustainability and community support.