By Dr George Venturini
Prince Charles ‘generates’ most of his income from his inherited landed estate, the Duchy of Cornwall estate. The property was built in 1337 by Edward III for his son and heir, Prince Edward. The main purpose of The Duchy is to provide a secure income for the prince and the future Princes of Wales. Today this estate has a property portfolio worth over one billion dollars. The Duchy of Cornwall is a 200-square mile of land set in 23 counties. It includes agricultural: Duchy Originals, residential: Poundbury – Charles’ model town in Dorchester, and commercial properties.
Duchy Originals is an organic food company which was founded by Prince Charles in 1990. The company made a profit of £2.25 million after its joint venture with Waitrose in September 2010. A sum of £625,293 was donated to charity. Duchy Originals had plans to launch the food brand in America and India as part of a five-year plan to quadruple yearly turnover from £50 million to £200 million.
The Duchy also owns 5,700 acres of woodland said to be worth £18 million. Other resources include historic estates – such as Charles’s Welsh home, Llwynywermod – marine assets, sporting lets, playgrounds and even allotments and garages worth £28 million. Its properties in London include 23 houses and the Oval cricket ground.
The Duchy now boasts holdings across 23 counties in England and Wales and not long ago bought a £35 million commercial warehouse in Milton Keynes, let to B&Q, as well as the Port Eliot estate in Cornwall.
According to Prince Charles’ 2011 financial details, he earned £17,796,000, a 4 per cent increase from his Duchy of Cornwall estate. It is interesting to note Prince Charles is also earning 17.9 per cent of Grants-in-Aids and government departments totalling to £1,962,000. Grant-in-Aids include the travel by air and rail on official visits. During the year of 2010 and 2011, Prince Charles and his second wife, Camilla Parker-Bowles, Duchess of Cornwall, spent about £388,000 a 56 per cent increase from previous years.
Prince Charles also earned profit from his property deals which grossed to £43 million from years 2001-2006. These profits were generated from the sales of a block of retail shops and farmlands as well as the renovation of The Oval cricket ground. (Prince Charles Net Worth, therichest.com).
On 29 June 2016 Clarence House, Charles’ official residence, revealed that his salary exceeded £20 million for the first time and the total assets of his estate reached £1,021,724,000.
Charles voluntarily pays income tax on the revenue he receives from the Duchy, which will be eventually handed to his son, Prince William, then his grandson, Prince George. In the 2015-2016 financial year his tax bill rose to a record £5 million, up 11 per cent on the previous year.
A Clarence House aide said: “This is the Prince of Wales deciding that he wants to be transparent about his private money. … All the money being accounted for here… is the Prince of Wales’s own money from the Duchy of Cornwall, this is not public money. …The Duchy is there to fund the heir to the throne, his children and their families in order that they should not receive a direct government grant.”
A spokesman for the Prince also stressed that Charles has no access whatsoever to the Duchy’s billion-pound capital. He said: “As Duke of Cornwall, H.R.H. is only entitled to the annual income, which is used to fund the public, private and charitable activities of Their Royal Highnesses. … The healthy balance sheet is testament to H.R.H.’s successful stewardship of the Duchy, and his desire to nurture the estate in order to pass it on to the next generation in a stronger condition.”
A further look at the accounts reveals that the Duchy has paid the Duchess of Cornwall’s sister, Annabel Elliot, £1.5 million since Camilla married Charles in 2005.
The interior designer was paid the money in lieu of ‘fees and commissions’ for styling holiday lets, as well as for the purchase of ‘furniture, furnishing and retail stock’.
However, Clarence House made clear that among the payments, a significant proportion was reimbursement for furnishing she had already paid for. (R. English, Prince Charles’s assets soar to record high as his salary … , The (London) Daily Mail, 29 June 2016).
Prince Charles’ income from his private estate, the Duchy of Cornwall, is expected to rise in 2017-18 to a record £22 million. He also receives another £1 million or so from the public purse to pay for his travel costs.
The Duchy of Cornwall does not pay corporation tax – despite it being a separate legal entity – an arrangement which the public accounts committee has demanded the government justify. Thanks to a deal with the government, Charles offsets the cost of butlers, personal dressers and valets against his personal tax bill.
It is an anachronistic and unfair arrangement which deprives the treasury of tens of millions of pounds every year.
Essentially, Prince Charles is a rentier – or, in the Australian jargon, a ‘coupon clipper’ – who takes advantage of his position as heir of the throne to enjoy his financially supported status.
It is not possible correctly to estimate the worth of Prince Charles because he is said to own huge portions of land which adds up to his property, some 10,000 houses around the world and the same number of shops and offices.
In addition to his travel expenses, the financial reports also delved into Charles’s other income: the revenue surplus of the Duchy of Cornwall.
Time reported that the Prince of Wales is worth $400 million, a sum which primarily comes from the Duchy of Cornwall.
According to the Duchy’s newly shared financial documents, Charles received £21.7 million, or US$28.6 million between March 2017 and March 2018, a 5 per cent increase year over year. That money goes to fund Prince Charles’s “public, charitable and private activities and those of his family,” including not only the Duke and Duchess of Cambridge and their children, but also the Duke and Duchess of Sussex.
The report also clarifies that while the Duke of Cornwall receives an income from the Duchy’s revenue surplus, he does not have access the Duchy’s capital value. It indicates that he pays income tax, but he does not pay capital gains taxes on the Duchy.
“The Prince pays capital gains tax but not in respect of the Duchy of Cornwall because he does not receive the capital gains – as he is not entitled to the capital assets,” reads the FAQ section of the Duchy’s website. “Although The Duchy is exempt from capital gains tax, the Duchy’s capital gains have to be reinvested in the business and cannot be distributed.” (C. Hallemann, ‘Prince Charles Was the Royal Family’s Biggest Spender on Travel Last Year’, Town&Country, 3 July 2018).
Prince Charles voluntarily pays a sum equivalent to income tax on that part of his income from the Duchy of Cornwall which is in excess of what is needed to meet official expenditure.(“Memorandum of Understanding on Royal Taxation” (PDF). HM Government, 2013) Since 1969 he made voluntary tax payments of 50 per cent of the profits, but this reduced to 25 per cent in 1981 when he married Lady Diana Spencer. (P. Hall, Royal Fortune, Tax, Money and the Monarchy, Bloomsbury, London 1992, at xxii).
One also learned that the Prince has increased the amount of his Duchy money going to William and Harry from £3.5 million to £4.9 million a year. Most of this sum – which also includes some capital spending – is allocated for their public duties, but because one are given no breakdown it is unclear how much is used for personal spending. And now that Harry has his own bride, one still does not know how much extra money will go on expenditure for Meghan.
So far there has been no word from the Prince’s spokespeople on whether, after the embarrassing revelations in the Paradise Papers about the Duchy of Cornwall’s offshore investments, there are any plans to change how his foreign holdings are overseen, or if they will be made more transparent.
There are two other odd things in the day chosen for the announcements which work against proper scrutiny. First the choice of date. The announcement coincided with Prince William’s Middle East tour, which meant that most of the royal press journalists were abroad rather than at Buckingham Palace and Clarence House – and were thus unable to cast an expert eye over the accounts. Was this deliberate? There were certainly mutterings from some royal correspondents that the announcement should have been rescheduled, although ‘The Palace’ maintained that the date could not be changed because the financial reports had to be passed to parliament. (‘Prince William’s Middle East tour to include trips to …’, telegraph.co.uk, 11 June 2018).
Second, there was the question of bringing out three financial reports on a single day. Reporters and analysts received a mountain of data, which had to be quickly processed. To cynical eyes, this looks like ‘The Palace’ managing the message: they would take a single hit on a single day, rather than having a succession of bad press days.
To be fair, ‘The Palace’ is more forthcoming with its financial information than in the past, and this one day of openness was a step in the right direction. But would it not be healthier if this happened all year round? (D. McClure, ‘Did the Royal Family pick a good day to bury bad news about its finances?’, The Guardian, 29 June 2018).
Continued Wednesday – A conga line of bludgers: Prince Charles (part 4)
Previous instalment – A conga line of bludgers: Prince Charles (part 2)
Dr. Venturino Giorgio Venturini devoted some seventy years to study, practice, teach, write and administer law at different places in four continents. He may be reached at George.firstname.lastname@example.org.
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