A Right Royal Business
I copy below the details of a Downing Street Petition to which I was a signatory and the Government’s response.
“We the undersigned petition the Prime Minister to remove the privileges which give the duchies of Cornwall and Lancaster an unfair advantage so that they have to operate according to the laws and taxation applied to all other businesses.”
Details of Petition:
“The duchies of Cornwall and Lancaster are exempt from corporation, capital gains and inheritance tax. They are also exempt from civil law so tenants have no recourse. This means that these duchies are able to operate on the same playing field as other businesses but they have a huge advantage, the time has come for them to tow the line.”
Read the Government’s response
The Duchy of Lancaster and the Duchy of Cornwall are private landed estates, whose annual surpluses provide an income for Her Majesty the Queen and the Prince of Wales respectively. The Queen and Prince of Wales do not have access to the capital or capital profits.
The Duchies’ main purpose, established in law, is to generate an income for their beneficiaries, across successive generations. Following the 1993 Memorandum of Understanding (MOU) on Royal Taxation, the Queen and Prince of Wales made a voluntary arrangement to pay income and capital gains tax at the same rates as any other citizen. The Duchies do not pay corporation tax because they are not companies and are therefore not within the charge of Corporation Tax. Their income is effectively taxed in the hands of their beneficiaries. Since neither beneficiary is entitled to the assets nor any capital gains or losses made by the Duchy of Lancaster or Duchy of Cornwall, no CGT is payable. Any part of the Sovereign’s estate, which passes to her successor will not be subject to inheritance tax (IHT) because the 1993 MOU was founded on the principle that the Sovereign as head of state should have a degree of financial independence from the Government of the day. However, any other bequests by the Sovereign would bear IHT in the normal way. The Duchies bear other taxes in the usual way, eg Stamp Duty Land Tax, VAT, council tax etc.
The Duchies, like the Executive arm of the Government, are part of the Crown and have a similar status in law. This means that in practice, on a case by case basis, the Duchies are subject to many aspects of civil law.
Wouldn’t it be nice if we could all have a multi million pound business set up for us to live off the profits and to pay tax on a ‘voluntary basis’. The underlined phrase (by me) makes one wonder why it is then that we the tax payers, cough up at least £150 million a year to support this family?