Funding Harry and Meghan will stretch finances of Princes Charles

The Prince of Wales was taken to the cleaners when he divorced Diana. Now his finances are being tested once more as he helps fund Harry and Meghan.

Charles’s former personal financial adviser revealed that Diana “took every penny he had” to fund the reported £17.5 million settlement in 1996.

The Prince of Wales may use a legacy from George VI to help fund the Duke and Duchess of Sussex after they step away from royal duties.

Prince Charles is understood to have committed himself to contributing to Harry and Meghan’s new life for at least a year. At present he gives them about £2.3 million a year of his pre-tax income from the Duchy of Cornwall. He could be required to pay tax on any continuing support funded by the duchy, an expert on royal finances said.

David McClure, the author of Royal Legacy, said that Charles might struggle to finance Harry’s new life, which includes a pledge by the duke to repay the publicly funded cost of refurbishing Frogmore Cottage. He might have to use money from a trust fund created by his grandfather, George VI, he said. “Charles is facing a significant outlay over a short period of time and may have to use private sources of income.”

Charles has had to rebuild his fortune after being “taken to the cleaners” during his divorce from Diana, Princess of Wales. Geoffrey Bignell, Charles’s former personal financial adviser, revealed that Diana “took every penny he had” to fund the reported £17.5 million settlement. “I was told to liquidate everything, all his investments so that he could give her the cash,” he told The Sunday Telegraph in 2004. Mr Bignell added: “He had no personal wealth left. She took him to the cleaners.”

Prince Charles, Princess Diana and their children William and Harry watch the march past on a dais on the mall as part of the commemorations of VJ Day in 1995.

His major source of wealth is an income from the Duchy of Cornwall which provided £21.63 million in the year to last March, slightly down on the previous 12 months. The prince was also paid £2 million from the publicly funded sovereign grant to cover his London office, official residences and cost of travel on official business.

The duchy income is used to fund the prince’s official duties and charitable activities, which cost a total of £8.6 million. A further £5.1 million is spent funding the activities of his sons and their wives, and a contribution to cover income tax and VAT of £4.7 million.

The duchy’s most recent accounts show that its income funded £3.2 million of Prince Charles’s expenditure on non-official activities — his personal life and private investments.

Mr McClure said: “The Duchy of Cornwall is a cash cow for Charles so he is likely to have been able to use some of that money to build up a private portfolio of shares. Historically there has been a blurring of what is official spending and what is private.”

The duchy was established by Edward III in 1337. Its most recent accounts show it has assets of £931 million including 52,760 acres of land and £291 million of commercial property.

The property portfolio includes the village of Poundbury in Dorset, most of the land on the Isles of Scilly, the Kennington Estate in south London and Tintagel Castle in Cornwall.

Charters governing the duchy state that the assets are for the “benefit of present and future dukes of Cornwall”. Charles is entitled to the surplus revenue but not the proceeds of the sale of assets, which must be retained to provide a future income.

The Duke of Sussex visiting a minefield in Dirico last September and his late mother Diana, Princess of Wales, during her visit to a minefield in Angola in 1997.

Norman Baker, a former Liberal Democrat MP who has examined Charles’s finances for his book And What Do You Do? What the Royal Family Don’t Want You to Know, said he believed he was now worth about £100 million. “This is not certain because he does not publish anything,” he said. “He does not pay for anything if he is able to find someone else to foot the bill. He is the tightest of the royals.”

Mr Baker questioned any use of Duchy of Cornwall income to pay for Harry as he “is never going to be the Duke of Cornwall” and said that it also would hit the public purse. “If he wants to support them from genuinely his own money, that’s fine,” he said. “However, I suspect he won’t do that, he’ll support them through the Duchy of Cornwall. What he will then do, based on previous experience, is claim that as a legitimate expense and he will use that to reduce his tax liability and therefore the public purse will continue to support Harry indirectly.”

Princess Diana and Meghan Markle.

Diana and Meghan.

Clarence House aides have made clear that the scale of the prince’s support will be reviewed after a year.

Providing security for the couple, who are expected to spend most of their time in Canada, could be hugely expensive unless the authorities in London and Ottawa agreed to foot the bill. Chris Mathers, a former Canadian police officer who now runs a private investigative agency, told CTV News, that it could cost up to £6 million a year.

Mr Baker suggested that as Harry would retain, though not use, his HRH style he could qualify for paid security in Canada. “We’re going to end up with the public purse paying more for Harry and Meghan than we do now because the security costs are going to go through the roof,” he said.

THE TIMES