London - Britain's Queen Elizabeth II will see her income rise by five per cent next year after the Crown Estate, a vast property empire from which she draws her funds, reported record profits on Thursday.

The Sovereign Grant, which pays for the queen's official duties and upkeep of royal properties, will rise from £36.1 million (42.5 million euros, $55 million) this year to £37.9 million in 2014.

Under a new funding arrangement agreed in 2011, the grant is set at 15 per cent of the profits of the estate from two years previously. The rest of the profits go into the public coffers.

Comprising London's famous Regent Street and Windsor Park among its properties, as well as almost the entire seabed around Britain, the estate is now worth more than £8 billion.

It announced record profits of £252.6 million in the financial year to March 2013, up from £240.2 million in the previous year.

Crown Estate chairman Stuart Hampson said: "We are proud that another record Crown Estate performance will again make a strong contribution to the nation's finances."

The Sovereign Grant was introduced by Prime Minister David Cameron's government to replace the civil list and separate funds for royal travel and upkeep of palaces.

Prince Charles, the heir to the throne, and his family live off the income from his own royal lands, the Duchy of Cornwall.