No doubt Prince Henry's royal baby and Meghan Marke will be born in a cradle of gold, and the tax-collecting authorities in the United States are eager to know, to the last penny, how much it is worth. The American Treasury has a special interest in that baby because of his dual nationality: British, by his father, and American, by his mother, the Duchess of Sussex.
"When One of the parents is an American and has resided in the United States for five years, of which at least two years after the age of 14, the baby is automatically a citizen," explains David Treitel, founder of American Tax returns, a consultant for American expatriates living in the United kingdom. "This is the case of Meghan," says Treitel, noting that this is the first time that this occurs in the British royal family.
This nationality comes with a series of particularly restrictive conditions: As with any American born, grow and die anywhere in the world, year after year the son of Enrique and Meghan must show the Treasury of his country that has complied with Your tax obligations.
From the moment of their birth, the money deposited in banks in their name by the parents so that they enjoy it in the future will have to be declared. The same as the money you enter, for example, if your parents decide that the boy or girl follow the footsteps of his mother actress and act on television or in movies.
Goodbye privacy, says Treitel. The U.S. Treasury "will learn much more about the wealth of the couple" through the statements of the baby and his mother. "It'S Going to get to America a lot more information," he says. For example, the Treasury will demand that any valuable gift to the son of Meghan and Enrique also be declared.
"Imagine that the Queen presents to the baby a beautiful and special art Book of the Royal Collection, with paintings by Van Gogh or Miró. If The gift is worth more than 100,000 dollars, You must communicate it, "says Treitel. However, the baby shower Gifts that Marke Received In new York in mid-February will not have to be registered if whoever has done them is another American, said the expert.
Although mother and baby should submit forms that will take long hours to their accountants, they may not have to pay many taxes: these could be compensated by the paid in the United kingdom, the Wall Street Journal told the Specialist in the topic Laura Saunders.
The efforts of the American authorities to maintain a very close vigilance of their expatriates can have important consequences for people whose only link with the country is that they were born there. That is the case of so-called "accidental Americans," who automatically received citizenship for being born there but who left the country when they were very young and have no other link there.
After the adoption in 2010 of the law called Foreign Account Tax Compliance (FATCA), which replaced the criterion of nationality by the tax domicile, those Americans are forced to declare their income to the United States and in some cases also to pay Taxes. Many of them left the country very small and the Association of Accidental Americans who grouped them asked President Donald Trump last year to find a solution to their dilemma.
Their status may become a delicate matter. If they refuse to comply with the US authorities, the banks in their countries of residence can be punished. So These entities can deny you services like accounts or mortgages.
To A lesser extent, the British royal family will also not be able to evade their fiscal obligations in the United States: An inconsistent tax return can lead to significant fines. There Is A solution to avoid headaches to the accountants of the real couple: Marke can give up his American citizenship. However, if it does, the child's tax returns must also be filed until he/she turns 18.