The tax specialist will be everywhere in the British royal baby | Money



Meghan, the Duchess of Sussex and Prince Harry, Duke of Sussex, visit the Andalusian gardens in Rabat, Morocco, on February 25, 2019. - Reuters pic
Meghan, the Duchess of Sussex and Prince Harry, Duke of Sussex, visit the Andalusian gardens in Rabat, Morocco, on February 25, 2019. – Reuters pic

NEW YORK, April 14 – Talk about being born with a silver spoon in your mouth: the royal baby of Prince Harry and Meghan Markle will be particularly bright.

And the US tax authorities will want to know how much this tool is worth.

This is because the baby will have dual nationality: British because of his father and American of his American mother, whose official title is the Duchess of Sussex.

"When one of the parents is American and resides in the United States for five years, at least two years after the age of 14, the baby automatically becomes a citizen," said David Treitel, founder of American Tax Returns, a consulting company for American expatriates. living in Britain.

"That's the case with Meghan," said Treitel, noting that this case is a first in the British royal family.

American citizenship is subject to many restrictive conditions: like any American who is born, grows up and dies anywhere in the world, Meghan and Harry's child will have to show the Internal Revenue Service every year that its status tax is blank.

From birth, money deposited in the banks by the royal parents – anxious to ensure a bright future for their offspring – must be duly reported to the tax administrator.

The same goes for the money that comes in if mom and dad decide, for example, to have the child follow in the footsteps of her ex-actress mother to become a star on television or in the cinema.

"Accidental Americans"

Forget about privacy, said Treitel. The IRS will "learn a lot more about couple wealth" through the couple's and their mother's tax returns. "Much more information will arrive in the United States," he added.

That is, the IRS will require all valuable gifts donated by non-Americans to Harry and Meghan's child – and he will be celebrated, will not he? – also be declared as active.

"Imagine that the queen gives the baby beautiful art books from the royal collection, with paintings by Van Gogh or Miro. If this gift has a value above 100,000 USD (400,000 RM), it must be reported, "said Treitel.

However, the birth gifts that Markle recently received in New York will not have to be declared if they come from American friends, the expert said.

And although the baby and the mother will have to submit forms that will take a lot of time to their accountants, they may still not have to pay a lot of taxes: these can be offset by the fees. paid to Britain, explained to tax consultant Laura Saunders, The Wall Street Journal.

The efforts of the US tax authorities to closely monitor American expatriates can have serious consequences for people whose only connection with America is that they were born there.

This is the case of the so-called "accidental Americans", such as thousands of French who automatically got US citizenship because they were born in the United States but left America. while they were very small and no longer have any connection with this country.

The fines

Since the adoption of the Foreign Account Tax Compliance Law in 2010, which replaced the nationality criterion with the tax domicile requirement, these individuals are required to report their income to the US tax authorities and, in some cases, to spit money.

Many of these people left the United States when they were very young. The association of accidental Americans who brought them together asked President Donald Trump last year to find a solution to their dilemma.

Their status can be a delicate subject. If they refuse to play ball with US tax authorities, their home banks can be punished. These institutions may therefore deny them services such as bank accounts and mortgages.

To a lesser extent, the British royal family can not escape its US tax obligations either: an imperfect tax return can result in heavy fines.

But there is a solution to avoid headaches to the royal couple's accountants: Meghan can give up her American citizenship. However, even if she did, tax returns should still be filed for the child up to the age of 18. – AFP


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