Members of Parliament Attack Tax Exemption For Heirs To The British Crown

As I have previously discussed, the heirs of British Crown are the sole holders of the Duchy of Cornwall, a valuable collection of properties that passes at death without incurring any estate or inheritance tax. Now, members of parliament are challenging some of the tax exemptions enjoyed by the duchy. In particular, members of parliament are demanding the government to justify why the duchy does not have “to pay corporation tax or capital gains tax on trading.” In light of this challenge, it is likely that the committee assembled to review the duchy’s tax arrangements will also examine the other royal finances, such as “public spending on the Queen and Prince Charles’s travel and official homes.”

A spokesperson from Clarence House denies any allegations that the duchy or Prince Charles are involved in tax avoidance or other wrongdoing. Clarence House claims that the duchy is not a corporation, which means that it is not liable to pay a corporation tax. Furthermore, Clarence House stated that Prince Charles already elects to pay income tax on income he receives from the duchy. It argues that if the duchy as to pay the corporation tax, it would be double taxation. Clarence House also argued that because Prince Charles does not receive any capital gains from the duchy, he should not have to pay the capital gains tax. Others, however, have openly welcomed this review of the duchy’s tax status and whether the Duke of Cornwall should pay more taxes than he currently does. 

See Robert Booth, MPs Challenge Tax Exemption For Prince Charles’s Estate, The Guardian, Feb. 15, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.