Ottawa Citizen

Prince rejects MPs’ tax demand

Income from duchies intended to finance duties

- BY ANDREW PIERCE

LONDON • Prince Charles has rebuffed an unpreceden­ted challenge by a powerful House of Commons committee of MPs to pay millions of dollars more tax on his private income.

The Times of London has learned that Charles secured the crucial backing of Gordon Brown, the treasury chief, in his looming showdown with MPs, in a rare private meeting at the prince’s Clarence House office.

The audience took place only hours before yesterday’s leak of the demand by the influentia­l public accounts committee for the prince’s $ 28- million Cdn annual income from the Duchy of Cornwall to be subjected to corporatio­n and capital gains tax.

The Queen will also be drawn into the row by the committee, since she does not pay corporatio­n or capital gains tax on her $ 20- million income from the Duchy of Lancaster.

Senior aides to Mr. Brown, who had held only one private meeting at Clarence House before Monday’s encounter, dismissed the committee’s attempted raid on the prince’s finances as “ shoddy and underhand.”

In the summer, in an attempt to meet demands for more transparen­cy, Charles disclosed for the first time that he paid income tax of $ 6.6 million at a rate of 23 per cent on his duchy income.

Both estates were set up hundreds of years ago with the sole purpose of providing an income for the sovereign and heir. The Queen declines to say how much income tax she paid on her $ 20 million.

Treasury financial secretary John Healey now faces a public cross- examinatio­n by the committee over why the estates are not subject to the taxes and why the private incomes of the monarch and heir cannot be scrutinize­d by MPs.

Many Labour MPs argue that the taxpayer loses tens of millions of dollars through the tax exemption, which, they argue, gives the duchies, both trading organizati­ons, a financial advantage over their competitor­s.

“ The duchy is a major business with huge assets,” one MP on the committee said. “ It is more and more being run as a property company. Why should the duchy have the advantage over its competitor­s of not paying the same tax rates?”

But a spokesman for Charles last night rejected the committee’s challenge, saying it misunderst­ood the role of the duchies.

“ They are not public bodies. They are private estates, specifical­ly created to provide income for the sovereign and the heir to the throne. This means the taxpayer does not have to fund the majority of the prince’s public duties,” he said.

 ?? STEVE PARSONS, THE ASSOCIATED PRESS ?? The Queen, shown above during a reception at Buckingham Palace for representa­tives of the British scientific community, and Prince Charles may be forced to pay more taxes if a committee of MPs has its way.
STEVE PARSONS, THE ASSOCIATED PRESS The Queen, shown above during a reception at Buckingham Palace for representa­tives of the British scientific community, and Prince Charles may be forced to pay more taxes if a committee of MPs has its way.

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