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Sunday, November 23, 1997 Published at 17:52 GMT


Bid to save Princes millions in tax is dropped
image: [ Prince Charles's abandoned a bid to save his sons 8.4m in tax ]
Prince Charles's abandoned a bid to save his sons 8.4m in tax

Princes William and Harry face a 8.4m tax bill on the estate of their late mother, Diana, Princess of Wales.

On Sunday, the Prince of Wales, decided to abandon legal moves which might have saved them from paying inheritance tax on their mother's estate for fear it would look like a tax dodge.

The problem arose because Princess Diana had not drawn up a new will that took into account the 17m settlement that she received following her divorce.

[ image: The young princes at their mother's funeral]
The young princes at their mother's funeral
It had been thought that Charles, acting for the princes, would make a "Barder" application, under which he would ask the court to allow him to reclaim the 17m he paid the princess and put the money in trust for his sons.

The move would have allowed the princes to avoid paying inheritance tax.

A spokeswoman for Prince Charles said that he would not take this action because he is keen that all tax dealings should be seen as straightforward.

She added that he hoped there would be no question that the Royal Family was receiving preferential treatment.

Guardian of the royal inheritance

[ image: John Major: at home advising the monarchy]
John Major: at home advising the monarchy
The Royal Family earlier appointed the former Prime Minister, John Major, as guardian of the 21m ($33m) inheritance left to Princess Diana's children.

Mr Major will protect the interests of Princes William and Harry during negotiations aimed at resolving legal problems caused by Diana's will.

Much of the confusion stems from the fact that Diana's will was drawn up when she estimated her wealth at around 1m. But taking account of the 17m divorce settlement and 3m interest since then, Princess Diana's estate was worth about 21m when she died aged 36 on August 31.

A meeting between William, 15, Harry, 13, and Mr Major took place three weeks ago when he was first appointed.

A spokesperson for the Prime Minister, Tony Blair, said: "We understand that former Prime Minister John Major has agreed with the full approval of the Queen and the Prime Minister to assist in considering relevant legal issues."

Mr Major was picked for the role because he had advised the Royal Family at the time of the divorce, a palace official said.

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