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Britain's Prince Charles and his wife Camilla, Duchess of Cornwall leave after the christening of Prince George at St James's Palace in London October 23, 2013.Reuters

A committee of British MPs is calling for tax officials to carefully scrutinize Prince Charles's business affairs and tax exempt status.

Prince Charles oversees the Duchy of Cornwall, a sprawling collection of farmland, commercial property and business interests that dates back to 1337. Edward III established the Duchy to provide a source of income for his son, and heir, and it has served the same purpose ever since for the eldest son of the monarch (Prince Charles is also the Duke of Cornwall).

Today the Duchy's holdings are worth about $1.2-billion and it pays no tax. The annual profit is handed over to Prince Charles who pays a voluntary amount of tax after deducting expenses for his royal duties, along with the duties of his wife, Prince William, the Duchess of Cambridge and Prince Harry. Last year Prince Charles received £19.1-million ($30-million), and paid £4-million ($6.3-million), in tax.

In a report released Tuesday, the House of Commons Public Accounts Committee questioned the tax exempt status of the Duchy, saying it could give the operation an unfair advantage. "The Duchy is engaged in a range of business activities like other commercial enterprises, with the difference that other businesses are subject to the usual rules on corporation and capital gains tax," the report said. "This tax exemption might mean that competing businesses do not have a level playing field on which to operate." The report called on finance officials to examine the impact of the exemption.

The committee also said there should be more transparency of the Duchy's finances and greater oversight by the government. "The Treasury [department] does not do enough to properly scrutinise the Duchy's finances. It relies on the Duchy to provide it with accurate information without carrying out its own independent checks," the report said.

Government officials are supposed to ensure that the Duchy maintains the long-term value of the estate and treasury officials must approve any expenditure over £500,000, or $833,000. However, the committee was told that no expense has ever been turned down and that the treasury relies on financial information provided by the Duchy without doing its own checks.

The report also recommended that the Duchy change its charter to reflect recent changes to the law which ended royal succession based on gender. "At the moment, the Duchy's charter rules that each future Duke of Cornwall be the eldest son and heir of the monarch, which is out of line with the Succession to the Crown Act 2013. A female heir to the British throne should be allowed to bear the title 'Duke of Cornwall'," the report said.