>UK Uncut : Duchy Cut!

Posted: December 18, 2010 in duchy of cornwall, economics, social

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UK Uncut: “At the same time as making massive cuts to public services, this government is letting rich individuals and corporations avoid billions of pounds of tax. Join UK Uncut’s Big Society Revenue and Customs (BSRC) and become part of an army of citizen volunteers determined to make wealthy tax avoiders pay.”

As a token measure how about the Duchy of Cornwall being brought fully within the UK’s tax laws so that its Duke pays his fair share. Personally I don’t think his voluntary  tax contributions are sufficent in our modern democratic age.

The Duchy of Cornwall has a constitutional existence outside of standard UK laws (rather like the legal status’ of the Channel Islands and the Isle of Man). Due to this relic of feudalism the Duke is not obliged to pay tax on the profits from his Duchy to the UK exchequer.

From –The Duchy of Cornwall a very peculiar private estate– by John Kirkhope expert in Cornish law:

The right not to pay tax.

Firstly it should be noted that the Duke of Cornwall is entitled to the income of the Duchy but not the capital.

Next, in the report issued by the House of Commons in 2005 it was stated: “In accordance with normal practice the Duchy is not subject to tax as it is not a separate legal entity for tax purposes. However, His Royal Highness is subject to income tax on the Duchy’s net income.”

The statement is surprising and difficult to understand. Effectively, the Duchy is exempt from capital gains tax and presumably inheritance tax. Asset sales, on which capital gains tax may potentially have been due, have totalled £123 million since 2001. Presumably this considerable benefit makes the task of running a ‘well managed’ private estate much easier.

It is in this regard that the Duchy website is misleading. It states: “The Prince of Wales already pays income tax on the Duchy’s surplus.”

He does not. He pays voluntarily an amount equal to the income tax he would have paid if he had been liable.

In reply to a question from the public accounts committee Mr Ross stated: “The Prince pays tax on a voluntary basis in exactly the same way as any other taxpayers.”

I don’t know how many of us pay tax on a voluntary basis.

The Duchy enjoys a highly privileged tax status unique to a ‘private estate’. In accordance with ‘normal practice’ it does not pay capital gains tax or inheritance tax and income tax is paid on a voluntary basis. The last figures published show the Duke’s income from the Duchy was £16 million. His voluntary contribution, equal to the income tax, would be £3 million. For completeness sake the Duchy does pay VAT.

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