Nov. 5 (Bloomberg) -- The heir to the U.K. throne, Prince Charles, may enjoy an unfair advantage as revenues from his estate are exempt from some taxes even though they include profits from commercial activities, a panel of lawmakers said.
The Duchy of Cornwall is a private estate that funds the public, charitable and private activities of the Prince of Wales, as Charles is officially known, and his family. Charles, 64, who also holds the title of Duke of Cornwall, gets income from about 53,000 hectares (131,000 acres) of land in 24 counties.
The estate’s enterprises include vacation accommodations and food. Its organic biscuits, meat and cider are sold primarily in high-end supermarket Waitrose Ltd. The duchy produced a surplus of 19.1 million pounds ($30.5 million) in 2012-13 on which no corporation tax was paid, Parliament’s Public Accounts Committee said in a report published today.
“The duchy enjoys an exemption from paying tax even though it engages in a range of commercial activities,” opposition Labour Party lawmaker Margaret Hodge, who heads the panel, said in an e-mailed statement. “This tax exemption may give it an unfair advantage over its competitors who do pay corporation and capital-gains tax.”
Hodge said the Treasury should examine whether the duchy’s tax exemption creates an “unlevel playing field.” The panel also said the transparency of Charles’s tax payments is limited by the fact that income tax and value-added tax, a levy on sales, are reported only as a combined total. The figures should be disclosed separately, the panel said, so it becomes clear how much income tax is paid by the prince, and at what rate.
The duchy estate was created in 1337 by Edward III for his son and heir, Prince Edward. The duchy’s primary function is to provide an income from its assets for the heir apparent, separate from that of the monarch. The holder of the duchy is not allowed to touch the estate’s capital, only to spend its income.
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