Prince Charles’s estate may have an “unfair advantage” over commercial competitors because it does not pay capital gains or corporation tax, MPs said Tuesday, as they called for the Treasury to investigate.
The Duchy of Cornwall, whose assets are valued at £763 million and which dates back to 1337, provides income for the Dukes of Cornwall, defined as the eldest male heirs to the throne.
It owns 53,154 hectares of land in 24 counties and has a financial portfolio.
In a report published on Tuesday, Parliament’s Public Accounts Committee called for the duchy to become more transparent and be more closely scrutinised by the Treasury.
It should also amend its charter to allow a female heir to the throne to inherit, in line with changes to succession law, the committee said.
“The Duchy of Cornwall performed well in 2012-13, increasing its total income and producing an overall surplus of £19.1 million,” Margaret Hodge, who chairs the committee, said in a statement.
“However, there are a number of steps that could help to bring the duchy, an historic institution, more in line with the expectations of the present day.”
As a Crown body, the duchy is exempt from capital gains and corporation tax, although Prince Charles pays income tax on his own income from the estate.
“This tax exemption may give it an unfair advantage over its competitors… the Treasury should examine whether the duchy’s tax exemption creates an unlevel playing field,” Hodge said.
A spokeswoman for the duchy said: “We do not believe the duchy has an unfair tax advantage over its competitors… the duchy is not subject to corporation tax and the duchy is not a corporation.
“The duchy is exempt from tax on capital gains. Any capital gains have to be reinvested in the business and cannot be distributed.”
The Treasury said it has a “constructive” relationship with the duchy and “challenges decisions where appropriate”.
The Treasury relies on the duchy to provide it with accurate information on its finances, the MPs’ report said, while Prince Charles’s own accounts also needed to be more transparent — for instance, by separating income tax payments from VAT, it said.
The duchy includes the new town of Poundbury in Dorset but is separate from Duchy Originals, Prince Charles’s food company best known for its organic biscuits.
Charles, 64, is due to inherit the throne on the death of Queen Elizabeth, 87.
Succession law was amended ahead of the birth of Charles’s first grandchild, George, this year, to enable a female heir to inherit the throne even if she has younger brothers.