Which does not refer to destruction, merely to defacing. It's the only legislation I am aware of over destroying banknotes. The 1971 coinage act makes it illegal to deface a post 1969 coin without the right permissions.
As for destroying a picture of the queen I can't find any law on that at all, or every time someone destroyed an envelope with a stamp on it would be a criminal offence. The closest legislation to that is here - http://www.legislation.gov.uk/ukpga/Vict/11-12/12/contents and I can't see any case in there, this is hardly about deposing the monarchy.