Being a parent is by itself a hard thing and it creates a lot of dilemmas and problems. Prince Harry and Meghan Markle are surely having a lot of worries during the expectation of their baby. However, this may be the only problem that they might have, the other one may be the tax system in the USA.
The entire world is now looking at Meghan and her the baby that she is going to have, and it created a lot of issues to the accountants at the Buckingham Palace since Meghan is the citizen of the USA, and according to the USA laws, her baby would be one as well. This practically means that both Meghan and her baby are subjects to the USA tax systems and have to pay taxes there. In reality, this may mean that taxes are to be paid to the infamous IRS by the royal accountants, which are extremely private.
Who is taxed in the USA?
When taxes are in question, the USA is somewhat different from all other countries in the world since all people who are citizens of the USA have to pay taxes. This practically means that the inspectors from the IRS may lower the wealth that Harry and Meghan have in order to get paid for Meghan and newly born baby.
According to the USA laws, if a USA citizen gives birth to a baby girl or a baby boy, that child automatically becomes the citizen of the USA in the weeks after it is brought in this world. The reason for citizenship is the fact that child’s mother is the citizen of the USA. However, no one from the royal family has ever been born as the USA citizen nor is anyone from the royal family having any other citizenship than the British one.
So, since Meghan is the citizen of the USA, she has to make a USA tax return and she also has the obligation to report any accounts that she might have abroad, i.e. outside of the USA. She also needs to report all goods and assets that are more than 200K USD worth. She even has to report all the gifts she has received that are more than 15,797 USD worth each. What would this practically mean? First of all, this may mean that the first item for declaration may be the ring that Meghan received from the Queen. This is actually a diamond with the priceless value. Apart from this one, there are also numerous other priceless presents that she got during her wedding. Secondly, there is Frogmore Cottage. The couple married there and this home is millions worth and has to be declared as such since the couple lives there. It would not be easy to report all the luxurious, expensive and priceless things that Meghan acquired when she married into the royal family.
Selling the items?
The problem may be even bigger if she decides to sell them all. First of all, is she decides to sell them, their price would be higher due to the person they belonged to. This practically means that she would also need to report the difference of the raised value of the assets to the IRS.
This all seems as a huge problem and as something that may trouble the couple. However, they have a lot of advisers and they have surely been thinking about this and potential solutions to this problem. They were surely aware that the child would get the USA citizenships when it is born.
The only way for Meghan to avoid IRS and paying the USA taxes would be simply to renounce the USA citizenship. On the other hand, her child would need to have the USA citizenship at least until it reaches 18, when he/she would also be able to renounce the USA citizenship and take the British one.
Meghan and Harry’s child would also be subjected to the USA taxes that include any earnings greater than 2,100 USD. Taking into account that the baby would be born in the royal family, it is sure that it would inherit a fortune right after it comes to this world.