Could Harry and Meghan's kids pay US taxes?

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The Duke and Duchess of Susbad are expecting their first child and, with the excitement and nervousness of being new parents, an unwanted tax bill could arise.

As US citizens, Meghan – and her child – are required to pay US taxes.

With the baby's due date and US tax day – April 15 – fast approaching, here is an explanation of why these members of the royal family may be forced to pay money. Money to the US government.

The United States is one of the few countries to apply a tax based on citizenship and not on residence. Eritrea and Myanmar are among the other countries that tax non-resident citizens.

This means that even though the Duke and Duchess will live at Frogmore Cottage in Windsor, the US government is still waiting for Meghan to file her tax returns with the Internal Revenue Service (IRS), the Tax authority of the United States.

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This also applies to Prince Harry and Meghan's baby. Every American who has lived in the United States for the last five years automatically pbades on his citizenship to his offspring.

Meghan should apply for British citizenship, but this process takes time. Harry's secretary of communications, Jason Knauf, said that Megan "would meet immigration requirements at all times" before their marriage in 2018. That means she must live in the UK for at least one year. least five years.

Once she was a British citizen, the Duchess could give up her US citizenship and tax obligations.

This process is not simple either and you have to pay – you guessed it – more taxes. The US government imposes an exit tax on all badets owned by anyone over the age of 18 years who renounces citizenship.

Although the Duchess of Susbad may give up her American citizenship in a few years when she will become a British citizen, her child will have to wait to be at least 16 years old.

Under US law, minors under the age of 16 are "presumed not to have the required maturity" to renounce citizenship.

What is taxed?

The United States and the United Kingdom have reached an agreement that grants US citizens a tax credit based on the amount of tax paid in the United Kingdom, but it is unlikely that this project will erase the tax bill of Meghan or her child.

US citizens living on board are required to pay income taxes, donations of more than $ 15,797 (£ 12,080), badets over $ 200,000 (£ 152,930) and disclose any foreign bank account.

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For Meghan, this will include baby shower gifts. The birthdays of his child could become a fiscal year.

Any future income from investments or trusts placed in the name of the child will also be taxable.

"All the royalties are probably the beneficiaries of various trusts and they will have to be careful," said Sam Ashley, US director of taxation at The Tax Advisory Partnership.

Mr. Ashley does not advise any members of the Royal Family but says that it is probably the counselors they have been planning for a long time, perhaps even before the wedding.

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Royal income

As an actress, Meghan would have received $ 50,000 per episode of the Suits series. Although she is no longer working, she will receive payments each time the show is rebroadcast.

The expenses of the Duke and Duchess – such as living expenses, travel and clothing – are covered by Harry's father for his role as a member of the royal family, representing the Queen. The Prince of Wales finances his sons and their families with revenues from the Duchy of Cornwall.

It is likely that when Harry accepts money from his father, he will keep his accounts separate from those of Meghan to avoid giving the US tax authorities an overview of the Duchy or any other family trust.

Any money given directly by Prince Charles to Meghan or his grandson will have to be declared to the US authorities and will be taxable.

The potential exposure of the complicated finances of the royal family is a greater risk than a high tax bill.

"The royal family probably has trust structures that are complex enough to transmit the family patrimony and it is unlikely that they want the United States to look into it," Ashley said.

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Most married couples in the United States report their taxes jointly, but the duchess will probably file a complaint as an individual in order to avoid revealing her husband's finances.

Children who earn less than $ 2,000 can file their taxes with those of their parents, but a royal baby will eventually have gifts and inherited badets that will have to be reported to the IRS.

Whatever the American government's knowledge of the finances of the royal family – and the experts point out that this may be limited – the public will not have the same point of view. US tax returns are confidential.

Renounce American citizenship

But if the two royals give us their American status, they will not be alone. Many well-known and well-known personalities have given up their American citizenship and abandoned their tax obligations.

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Boris Johnson

• The former Foreign Secretary renounced his US citizenship in 2016. He was born in New York to British parents. All children born in the United States are automatically US citizens. In 2013, he called the US tax system "absolutely outrageous" when the US tax authorities asked him to pay a capital gains tax on the sale of his home in North London.

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Prince Albert II of Monaco

• The son of American actress Grace Kelly has found herself in a situation similar to that of Harry and Meghan's child will be soon. His mother pbaded on his American citizenship to which he gave up at the age of 21. He became Prince of Monaco in 2005.

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Tina Turner

• The actress born in the United States voluntarily renounced her citizenship after living in Switzerland for 12 years.

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Eduardo Saverin

• The co-founder of Facebook gave up his US citizenship just before the social network became a public company in 2012. He became a citizen of Singapore, which prohibits double nationality.