Prince Harry's marriage has brought the British royal family a new famous member, Meghan Markle, who is also an American actress. However, Harry's love is causing a major financial headache for the royal family. Meghan's American citizenship is the main cause of this trouble.
The Duchess of Sussex was born in Los Angeles, California. She moved to England when she got engaged to Princess Diana's youngest son in November 2017. Since then, Meghan has been involved in royal activities.
Harry and the Suits actress tied the knot in May 2018, but Meghan has yet to become a British citizen. Before their wedding, Harry's communication secretary, Jason Knauf, said the soon-to-be wife of a prince intends to become a British citizen. She would abide by the immigration requirements like other immigrants and will go through the process which will take several years.
This means, after over a year of marriage, Meghan is still an American citizen. Therefore, she is required to pay her taxes in the U.S. for any income earned or allowances she receives.
Under the U.S taxation laws, Meghan is obligated to file her tax returns and to report any foreign accounts, assets more than $200,000, and gifts valued more than $15,797 regardless of whether or not it is in her actual possession or not.
However, what hurts the royal family most is that the Internal Revenue Service of the U.S. could also attempt to tax Prince Harry's income as he is married to an American. This would cover the £10 million ($12.8 million) inheritance from his mother, Princess Diana, and the £7milllion ($9 million) from the Queen mother.
Harry is already paying his annual income tax for all his inheritance in the UK, but it could also be subject to American taxation. Harry also receives money from his grandmother, Queen Elizabeth II, and his father, Prince Charles. These may also be taxed by the U.S.
Reports indicate that the only way for the Duke and Duchess of Sussex to avoid paying US taxes would be for Meghan to renounce her US citizenship once she becomes a British citizen. The royal family has reportedly hired US tax experts to help them resolve the burden with the US tax system.
In addition, any income that is attributed to Harry and Meghan's son, Baby Archie, could also be taxed. Even after Meghan renounce her American citizenship, Archie will still be liable for US taxes until the age of 18. By that time, he can decide if he wants to renounce his US citizenship.
