The royal wedding between Prince Harry and Meghan Markle is less than two weeks away. However, Meghan just received some terrible news as it was revealed that she will have to pay lots of money in taxes to the U.S. as a member of the British royal family.
Business Insider reported that if Meghan becomes a dual US-UK citizen, she will have to continue filing her taxes each year with the IRS. If she has more than $300,000 in assets at any point during the year, Meghan will have to file a specific form that details foreign assets, which could include foreign trusts, subjecting the royal family “to outside scrutiny.”
At the same time, Meghan will be paying taxes to the IRS on any income she makes, regardless of where she earns it.
“US citizens, green-card holders, and permanent residents are required to file tax returns with the IRS every year no matter where they reside,” said Avani Ramnani, director of financial planning and wealth management at Francis Financial. “This is a special tax return called the expatriate tax return. US citizens, including Meghan Markle, get taxed on international income earned outside the US.”
“The key for Meghan and her advisors would be to figure out what type of income she will be getting,” Ramnani continued. “Will this income be from the investments of a trust, or ‘wages’ for any work that she does or any other type of income? Sometimes, getting one form of income is more advantageous than another.”
Though Meghan may qualify for a foreign tax credit, which allows a tax on any income exceeding $104,100 to be reduced depending on the amount of taxes paid in the expat’s country of residence, Ramnani said that “this credit may not be dollar-for-dollar as there are a lot of factors that come into play.”
We hope that Meghan does not let these tax issues ruin her big day!
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