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Members of the Royal Family other than The Queen and The Prince of Wales are subject to tax in the ordinary way.[21] There is a Memorandum of Understanding on Royal Taxation, dated 5 February 1993, which records the arrangements for the payment of tax by The Queen and The Prince of Wales.[22][23] Only a proportion of capital gains arising on assets belonging to the Privy Purse are subject to capital gains tax. The Memorandum of Understanding justifies this on the basis that the Privy Purse meets both public and private expenditure. The proportion of gains and losses to be taken into account is:
(A - B)/A
where:
A is the Privy Purse income
B is any excess of Privy Purse expenses over Duchy of Lancaster income.[24]
The Prince of Wales is not legally obliged to pay tax on his income from the Duchy of Cornwall but has chosen to pay income tax at the normal rates pursuant to the Memorandum of Understanding on Royal Taxation. The income of the Prince of Wales from sources other than the Duchy of Cornwall is subject to tax in the normal way.[23]
From 1969 Prince Charles made voluntary tax payments of 50% of profits from the Duchy of Cornwall, but this reduced to 25% in 1981 when he married Lady Diana Spencer.[25] This arrangement was replaced by the Memorandum of Understanding on Royal Taxation in 1993.
The Official Expenditure of the Queen and the Prince of Wales is regarded as tax deductible. The rules on what constitutes Official Expenditure are set in the Memorandum of Understanding.[23]
Property passing from monarch to monarch is exempt from Inheritance Tax, as is property passing from the consort of a former monarch to the current monarch.[26]
Finances of the British Royal Family - Wikipedia, the free encyclopedia
Corporation Tax rates
Rates for financial years starting on 1 April
Rate 2011 2012 2013 2014
Small profits rate* 20%* 20%* 20%*
Small profits rate can be claimed by qualifying companies with profits at a rate not exceeding £300,000 £300,000 £300,000
Marginal Relief Lower Limit £300,000 £300,000 £300,000
Marginal Relief Upper Limit £1,500,000 £1,500,000 £1,500,000
Standard fraction 3/200 1/100 3/400
Main rate of Corporation Tax* 26%* 24%* 23%* 21%*
Special rate for unit trusts and open-ended investment companies 20% 20% 20%*
Main rate of Corporation Tax
The main rate of Corporation Tax applies when profits (including ring fence profits) are at a rate exceeding £1,500,000, or where there is no claim to another rate, or where another rate does not apply.
In addition to the rates set out in the above table, the main rate of Corporation Tax for 2015 is set at 20 per cent. The small profits rate will be unified with the main rate, so from 1 April 2015 there will be only one Corporation Tax rate for non-ring fence profits - set at 20 per cent.
HM Revenue & Customs: Corporation Tax rates
