Prince of Wales defends tax status
UK: Clarence House has defended the Prince of Wales’ financial
arrangements after antimonarchy campaigners accused the Duchy of
Cornwall of using “a highly questionable interpretation” of its legal
status to avoid corporation tax.
Republic, which campaigns for an elected head of state, said it had
written to HM Revenue and Customs (HMRC) asking it to investigate and
“take the necessary steps to ensure that the Duchy is paying corporation
tax in line with normal practice for corporate entities.”
But Clarence House said on Saturday there was no legal basis for the
Duchy to pay corporation tax as the Duchy was a trust set up to generate
income for Princes of Wales. It said: ''The Prince voluntarily pays
income tax on income generated by the Duchy, so there is no legal
requirement to pay corporation tax and to do so would result in double
taxation.''
Republic based its criticisms on a November 2011 tribunal ruling on a
dispute over whether the Duchy was required, as a public authority, to
conduct an environmental assessment of an oyster farm. Republic said
that the tribunal's finding that the Duchy was a “body or other legal
person” meant it had “its own tax obligations”.
But the findings of the tribunal , which said the Duchy's historical
context was “complicated and possibly unique”, do not provide any
clear-cut support for this view. It found against the Duchy on the
grounds it was a public authority. The ruling said the Duchy's modern
role was “carrying out the public function or service of providing an
income for the undertaking of an extremely important constitutional role
for the UK.”
Republic's move came in the wake of intense public interest in
corporate tax after the Public Accounts Committee criticised Starbucks,
Google and Amazon over their tax arrangements earlier this month.
Graham Smith, chief executive of Republic said: At a time when the
country is under unprecedented economic stress it is unacceptable that
the heir to the throne is avoiding his tax obligations in this way.”
He added: “As with Starbucks and Google there is a moral obligation
to pay a fair rate of tax.”
The Duchy was established in 1337 to provide an income for the eldest
living son of the Monarch, by a charter stipulating that he would be
entitled to it income, but not to the capital, thereby preserving the
estate for his successors. It is a landed estate, mostly in the south
west of England, comprising 53,628 hectares. CNN NEWS |