Why the US Treasury has a special interest in the birth of Harry and Meghan's son

No doubt that the royal baby Prince Harry and Meghan Markle will be born in a cradle of gold, and the US tax authorities are eager to know "how much it's worth".

The US Treasury has a special interest for this baby because of his dual nationality: British from his father and American from his mother, the Duchess of Susbad.

"When one of the parents is American and resides in the United States for five years, including at least two years after the 14th birthday of his birth, the baby is automatically a citizensays David Treitel, founder of American Tax Returns, a consulting firm for US expatriates living in the UK.

"That's the case with Meghan," Treitel said, noting that it was the first time that this occurred in the British royal family. And this nationality is accompanied by a series of particularly restrictive conditions: like any American who was born, grew up and dies all over the world, year after year, the son of Harry and Meghan You must show the treasury of your country that you have complied with your tax obligations.

From birth, the money deposited in the banks in his name by the parents so that he can enjoy it in the future must be declared. Same as the money that comes in, for example, if his parents decide that the boy or the girl follow the footsteps of his actress mother and act on television or in the cinema.

The US Treasury "will know a lot more about the wealth of the couple" thanks to the statements of the baby and his mother. "Much more information will reach the United States," he said. For example: the treasure will require that any valuable gift to the son of Meghan and Harry be also declared.

"Imagine that the queen gives the baby a beautiful and special art book from the royal collection, with paintings by Van Gogh or Miró. If the gift is worth more than $ 100,000, you must report it."said Treitel.

However, the birth gifts that Markle recently received in New York will not have to be reported if they were made by other Americans, the expert said.

Although mother and baby must submit forms that will keep their accountants busy for long hours, they may not have to pay a lot of taxes: they could be offset by those paid in the UK, according to The Wall Street Journal subject specialist Laura Saunders.

The efforts of the US authorities to maintain a very close surveillance of their expatriates can have important consequences for people whose only connection with the country they were born in this country.

This is the case of the so-called "accidental Americans", who automatically received citizenship because they were born there but left the country very young and have no other connection there. .

After the adoption of the Foreign Account Tax Compliance Act (FATCA) in 2010, which replaced the nationality test with the tax domicile test, these Americans are forced to report their income in the United States and, in some cases, to pay taxes.

Many of them left the country very small and the Accidental Americans Association that groups them asked President Donald Trump last year to find a solution to his dilemma.

Your status can become a sensitive subject. If they refuse to comply with US authorities, banks in their country of residence may be sanctioned. Then, these entities may refuse services such as accounts or mortgages.

To a lesser extent, the British royal family will also be unable to evade its US tax obligations: incoherent tax reporting can result in significant fines.

But there is a solution to avoid headaches at the windows of the royal couple: Meghan can give up his American citizenship. However, if that were the case, the child's tax returns must also be presented until it reaches the age of 18 years.