Letter: Royal Finances
Posted on: Sunday, 3 July 2005, 12:00 CDT
Your article 'Exposed: How the Prince of Wales pocketed pounds 8m from Highgrove' (June 26) displays a lack of understanding of the difference between income and capital. Princes of Wales are entitled to the net income of the Duchy of Cornwall, but not to the Duchy's assets and capital profits. Net rental income " what is left after maintenance and other expenses " is paid to the Prince as part of the Duchy's revenue surplus. This is far from being a revelation.
Because the Duchy is required to obtain a proper return from its assets, the Prince pays a market rent of pounds 336,000 a year for Highgrove and the Home Farm. The rent paid by the Prince, together with rents paid by all the other Duchy tenants, forms part of the income which he receives from the Duchy.
If the Prince did not pay rent for Highgrove it would mean his living costs were being met by the Duchy (which is not permitted). He would be evading tax on the rent which he pays as a tenant, but receives as Prince of Wales. All of the Prince's income from the Duchy is taxed.
Paddy Harverson
Clarence House, London
Source: Independent on Sunday, The
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