The tax specialist will be everywhere in the British royal baby



NEW YORK: Talk about being born with a silver spoon in your mouth: Prince Harry's royal baby and Meghan Markle will have a particularly bright one.

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, and at least two years after the age of 14, the baby is automatically a citizen," said David Treitel, founder of American Tax Returns, a consulting firm for American expatriates. living in Britain.

"This is the case for Meghan," said Treitel, pointing out that this case was a first in the British royal family.

American nationality comes with 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 demonstrate year after year to the world. Internal Revenue Service that its tax status 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 thing would apply to the money that comes if mom and dad decide, for example, to follow the child in the footsteps of his former 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 the wealth of the couple" through the couple's tax returns and their mother's. "Much more information will arrive in the United States," he added.

Namely: the IRS will demand that all the precious gifts of non-Americans to Harry and Meghan's child – and he will be celebrated, is not it? – also be declared as active.

"Imagine that the queen gives the baby fine art books from the royal collection, with Van Gogh or Miro paintings.If this gift is worth more than $ 100,000, it must be reported," Treitel said. .

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 present forms that will take a lot of time to their accountants, they may not have much to pay taxes: these could be offset by the fees paid in Britain, explained to Laura Saunders, tax expert 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 are simply born there.

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

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 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.


Source link