PRINCE CHARLES is using his Duchy of Cornwall to escape taxes, according to a parliamentary Public Accounts Committee hearing held yesterday.
The duchy, a private estate established in 1337 in order to provide the heir to the throne with a private income, pays no corporation tax or capital gains tax due to a memorandum of understanding on Royal taxation struck between government and the Crown in 1993.
Duchy finance director Keith Willis’ argument that the estate’s corporation tax exemption was justified by the low amounts paid by other companies drew an incredulous response from committee chair Margaret Hodge, who said it was “shocking, shocking, shocking”.
The prince’s principal private secretary William Nye appeared before the PAC in order to give evidence on the royal’s accounts. He was accompanied by Willis and the Treasury’s officer for accounts Paula Diggle.
The estate, Nye said, is not a corporation, and as such is not liable to corporation tax, despite committee chair Margaret Hodge insisting it “has all the features of a corporation”.
“Essentially it’s a set of properties that belong to the Duke of Cornwall. The fact that it’s a large set of properties doesn’t mean it is a corporation,” Nye told the MPs.
There is “an issue of fairness and level playing fields”, in the duchy making investments without having to pay corporation tax and capital gains tax as other businesses do, Hodge told Nye, something he refuted.
While the estate is an “unusual” entity, Nye said, he repeatedly returned to the fact Prince Charles, as the duke, voluntarily pays income tax at the highest rate on the earnings he generates from it, after deducting expenses.
“It is a private landed estate,” Nye said. “He [Charles] manages it and he is responsible for running it. He receives an income but the assets of the estate he has to manage for future generations.”
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