A political storm is brewing ahead of Prince Harry’s and Meghan Markle’s May 19 wedding over whether to crack down on homeless people and beggars in the well-to-do English town of Windsor.
A political storm is brewing ahead of Prince Harry’s and Meghan Markle’s May 19 wedding over whether to crack down on homeless people and beggars in the well-to-do English town of Windsor. AP Photo - Alastair Grant

Meghan ‘won’t split royal cash’

PRINCE Harry is unlikely to share his fortune with Meghan Markle even after they're married - because she'd be stung by American income tax.

Although the actor intends to become a Brit after tying the knot in May, she can only become naturalised after she's lived in the UK for three years.

Unless she renounces her US citizenship, she will have to continue paying tax to the United States' Internal Revenue Service (IRS).

Royal expert Marlene Koenig told The Sun: "Even when married to a member of the British royal family, as long as she remains a US citizen she will have to pay income tax.

"If she has investments in the United States, say for example a retirement plan that she set up, if that's making money, she would have to pay up.

"This is even on money earned outside the United States. If she receives money from her husband or his family, and that's considered income, she would have to pay income tax on that."

Meghan Markle as Rachel Zane in Suits.  Picture:  Supplied
Meghan Markle as Rachel Zane in Suits. Picture: Supplied

This could cause a headache for the royal family, as if she has more than $382,000 (US $300,000) worth of assets in any given tax year, she'll be expected to file a Form 8938 document revealing the detail of these assets - which may include foreign trusts and details of the royal family's estate that was previously undisclosed.

The Form 8938 is a pretty likely scenario given Meghan made approximately $63,000 for each episode of Suits and has an estimated net worth of around $6.3 million according to celebritynetworth.com.

When Princess Diana died, Prince Harry received half of her £21.5 million (AUD $36.2 million) estate and shares a £3.5 million (AUD $6.4 million) annual allowance with the Duke and Duchess of Cambridge.

"Prince Harry receives no public funding," Marlene said.

"But it is possible there may be other family trusts that he receives money from - we don't know officially if the Queen has set up trusts for her grandchildren - it is possible.

"It's the same thing with some of the Queen Mother's money, there were rumours that there were different trusts set up, but that's not public information.

"With that sort of money, if Meghan's name is on that account, most likely she would be dinged - that would have to be reported as income in the United States.

"You can be sure that those at Buckingham Palace and those who run the accounts are looking very carefully at all of this to make sure that the royal family's money does not get reported to the IRS!"

David McClure, the author of the book Royal Legacy: How the royal family have made, spent and passed on their wealth, told the Washington Post that British royals' finances have long been "impenetrable" to outsiders.

He explained: "I've been truffling in the royal coffers for seven or eight years," adding that no one really knows how wealthy the royals are.

"I suspect the queen doesn't know," he added.

Dianne Mehany, a tax lawyer at Caplin & Drysdale, warned: "It's not outside the realm of possibility that a form filed by the wife of a royal would draw increased scrutiny."

However, if Prince Harry was to move to America to live with Meghan, he wouldn't be expected to file taxes in Britain.

The system of taxing US citizens abroad is an unusual one. It was introduced during the Civil War as part of the Revenue Act of 1862 to punish men who fled the country to avoid joining the military.

This article originally appeared on The Sun and has been republished with permission.


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