According to a recent survey, three-quarters of British citizens believe that the Royal family should be subject to capital gains and corporate taxes on their own properties.
It follows investigations into Prince William's Duchy of Cornwall and King Charles III's inherited Duchy of Lancaster empire by the Sunday Times and Mirror with Dispatches. The King and his heir are receiving millions of pounds in rent from the NHS and other public entities, according to our investigation. At the same time, we disclosed that one in seven dwellings in the Duchy of Cornwall have the lowest energy efficiency ratings (F and G), putting renters at risk of fuel poverty and causing them to live in wet, moldy, and cold homes.
The Royals make £50m a year in profit from the £2bn Duchies and voluntarily pay income tax on these earnings, after deducting the costs of official expenditure. But the estates are exempt from capital gains tax, which was recently hiked by the Government, as they argue the proceeds from sales are reinvested and not paid out. They are also exempt from corporation tax, which has risen sharply in recent years, and inheritance tax, meaning hundreds of royal farms are and tens of thousands of hectares of farmland are unaffected by the controversial recent changes to inheritance tax on farms.Since our investigation, more than 150,000 members of the public have signed a petition by campaigners at 38 Degrees calling on the Royals to:
- Give a discount rate to any public services or charities like the RNLI using their land and properties
- Speed up work to fix the properties they own that have substandard living conditions
- Voluntarily pay corporation and capital gains tax in the same way they voluntarily pay income tax
A separate survey carried out by Survation for 38 Degrees also found that half the population want half (50%) of Brits think the Royals should not be allowed to make profit from renting their land to public services and charities - with only around 1 in 3 (35%) saying they should be able to do so.
An even bigger majority believes they should “voluntarily pay corporation tax and capital gains tax on the profits made on their estates” with 75% agreeing versus 15% who disagree. The over 65s are most likely to believe the Royals should pay these taxes (86%) with those aged between 18 and 24 the least likely (57%).
More than 6,800 38 Degrees supporters have sent King Charles Christmas cards calling on him to “do the right thing”. They included NHS nurse Matthew Hayes, from Lothian, who told the King: “I have worked in the NHS as a nurse for more than 20 years and watched your governments progressively underfund the organisation. The NHS is on its knees, and now needs everyone to help, including you. You can help do this by paying your fair share of tax, and removing the requirement for rent to be paid by the cash strapped NHS and charities.”
Garry Mills, from Colchester, told King Charles: “I am forever a Royalist and support you in all things. That said I am dismayed to hear that your businesses are charging a Government funded entity in addition to receiving the sovereign Grant. Is there any way you could help the nation by changing this agreement?”
Jane Green, from Stafford, told him: “Like you, I am currently receiving cancer treatment. This costs several thousands a year. By not charging the NHS rent for parking ambulances on your land, you could easily help to alleviate the financial burden to the NHS. I believe in your integrity to do the right thing.”
Matthew McGregor, CEO at 38 Degrees, said: “This polling shows that the vast majority of people think that, if the Royals are profiting from a vast property empire, then they should be paying corporation and capital gains tax on the profits generated. Why should they have some kind of special arrangement?
“The British public are well known for their innate sense of fairness - so it’s no surprise that after the revelations about the Royal family making profit from public services and charities emerged, they jumped into action in their hundreds of thousands - from signing petitions to sending thousands of individual Christmas cards to Buckingham Palace. “
Charging corporation tax and capital gains tax to the Duchies of Lancaster and Cornwall would raise millions of pounds for the Treasury at a time when the Government is hitting pensioners through to farmers in a bid to fund public services. We can reveal that both Duchies now earn most of their income from commercial deals, not traditional money makers like tenant farms and property rentals.
The Duchy of Lancaster earned 69% of its £35m revenues this year from commercial business, up from 59% back in 2011. The value of the estate has more than doubled to £830m, an increase of 50% after inflation is taken into account.
The Duchy of Cornwall’s commercial earnings have grown 115% since 2011 to nearly £21m and is now more than half of its revenue During the decade from 2010 to 2020 it made on average £3.3m a year from selling property. But during the last four years this rose to £44m - or more than £11m a year.
It recently made more than £30m profit selling a warehouse in Milton Keynes it had only bought a few years previously. Deals like this have helped the total value of the Duchy soar to nearly £1.3 billion, up 73%, or nearly twice the rate of inflation.
It pays no capital gains tax, which the Government this week raised to at least 24%, because it says that “the vast majority of its property holdings are held for the long term as core holdings” and all capital gains from property sales are reinvested. Prince William “voluntarily” pays income on the surplus profits he receives from the Duchy. The Duchy says: “This is not a requirement but something His Royal Highness chooses to do voluntarily. “ Last year, he received nearly £24m from the Duchy, income that “is used to fund the public, charitable and private activities of The Duke and Duchess of Cornwall”.
A Duchy of Cornwall spokesperson said: “The Duchy estate does not pay Corporation Tax as it is not a company. All revenue surplus is distributed to the beneficiary and income tax is paid on it voluntarily. The Prince of Wales is not entitled to the Capital of the Duchy estate and therefore is not taxed on Capital profits, which are entirely reinvested in the estate and which he does not receive.”
The Duchy of Lancaster said last month: “The Duchy of Lancaster operates as a commercial company, managing a broad range of land and property assets across England and Wales. It complies with all relevant UK legislation and regulatory standards applicable to its range of business activities. The financial and environmental performance of the Duchy is disclosed each year in our published Report and Accounts which are independently audited and freely available on the Duchy of Lancaster website. His Majesty The King voluntarily pays tax on all income received from the Duchy, as did the late Queen Elizabeth II.”
Buckingham Palace declined to comment.
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