Inheritance tax
20. No inheritance tax will be payable in respect of assets which are held by The Queen as Sovereign, rather than as a private individual, or in respect of any other assets required for the official purposes of the Crown.
21. For other assets the normal rules for computing inheritance tax will apply to gifts and bequests (ie transfers of value) from or to The Queen, except that:
(a) bequests to the new Sovereign on the death of The Queen and gifts to the new Sovereign
before The Queen's death will be disregarded
(b) no inheritance tax will be payable which would reduce assets passing to the Sovereign on
the death of a consort of a former Sovereign
(c) for gifts and bequests from The Queen, the inheritance tax threshold will be regarded as
nil.
22. These arrangements will apply to gifts and bequests made on or after 6 April 1993.
Arrangements for accounts of amounts chargeable to inheritance tax and payment of tax
23. An account of the inheritance tax payable will be provided within 12 months of, and the tax will be due 6 months after, the end of the month in which death, or the relevant transfer or event, occurs, subject to the instalment facilities and any provisions for deferral available under the normal rules of inheritance tax. Where any tax is paid or repaid after the due date, interest will run, at the appropriate rate, from the due date to the date of payment or repayment.
Changes in taxation
24. Any changes in taxation falling on personal income, capital gains or private assets, including the repeal of existing taxes or the introduction of new taxes, will apply in calculating the tax due under these arrangements on The Queen's private income, chargeable gains and assets, as defined above.
Successors to The Queen
25. It is intended that the arrangements in this Memorandum of Understanding should continue indefinitely and should apply to successors to The Queen, with or without variation, unless any successor decides otherwise. The Prince of Wales has confirmed that he intends that these arrangements will apply to him on his accession to the Throne.
The Prince of Wales
26. Although he is otherwise liable to taxation, The Prince of Wales is not liable to income tax on income he receives from the Duchy of Cornwall. The Crown's exemption applies to income from the Duchy of Cornwall which, in the circumstances indicated in paragraph 8, belongs to the Sovereign. The Prince of Wales voluntarily pays 25% of the gross income he receives from the Duchy of Cornwall to the Exchequer.
27. The Prince of Wales has agreed that, in relation to income from the Duchy of Cornwall arising on or after 6 April 1993, his payments to the Exchequer will cease; and instead, he will voluntarily pay income tax on income arising after that date from the Duchy of Cornwall to the extent that it is not used to defray expenditure in connection with his official duties, or official duties performed by The Princess of Wales. The amount of Duchy of Cornwall income to be taxed and the expenses to be taken into account, are to be determined in the way set out in Appendix B. The arrangements for statements of taxable income and payment of tax set out in paragraphs 12 to 14 will also apply to The Prince of Wales in relation to income from the Duchy of Cornwall.
28. The Duchy of Cornwall owns Highgrove. The Prince of Wales has agreed, as part of these arrangements, that from 6 April 1993 he will pay the Duchy a market rent for it, and will reimburse the Duchy the cost of any other assets or facilities made available to him or his family for private use.
Administration
Agreement of tax due
29. All statements and accounts required under these arrangements will be made to the Inland Revenue, and the amount due will be agreed with them and paid to them.
Accounting for tax paid
30. Amounts paid will be brought to account in the Inland Revenue's General Account of
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