As Prince Harry and Meghan Markle exchange vows in May this year, the royal couple will begin a new chapter in their lives as husband and wife. While married couples usually opt to combine all of their assets in a conjugal regime, the same is unlikely for Meghan and Harry’s situation.
A royal expert suggested that the couple may choose to keep their properties separate, as Meghan’s American citizenship will largely affect Harry’s royal wealth in terms of taxes. Until Meghan formally renounces her U.S. citizenship, she is still covered by the United States’ Internal Revenue Service and thus required to fulfill her tax obligations. Otherwise stated, even after she marries a member of the British royal family, she will still have to pay income tax in the U.S. as an American citizen.
U.S. tax law states that earnings made outside the country are still covered by income tax. Whatever money Meghan receives from her husband or his family will be considered income, hence subject to income tax in the U.S., royal expert Marlene Koenig told The Sun.
Although the 36-year-old actress has expressed her intention to apply for British citizenship, she can become a naturalized citizen of the UK only after three years of residency.
However, the problem is not so much about the fact that they will have to pay a large amount of tax. The bigger issue is that Meghan’s American citizenship could open up the royal family’s finances to scrutiny. If Meghan earns more than $300,000 in assets in a given tax year, which is plausible given her career as an actress plus her husband’s wealth, she will file Form 8938 annually, a document that will require her to reveal the details of these assets, including foreign trusts.
After Princess Diana’s death, Prince Harry received half of his mother’s £21.5 million estate. He also shares a £3.5 million annual allowance with his brother Prince William and sister-in-law Kate Middleton. Koenig added that while Harry does not receive any public funding, it’s possible that he’s also receiving money from other family trusts.
Meghan Markle’s tax information will remain unavailable to the public, but the IRS will still review the information contained therein, including crucial details about the royal family’s coffers. There’s also a risk that the information could leak, therefore exposing it to a larger audience.
Sharing this data with the public could be problematic to the British government and the royal family, who for years have kept information about their finances a heavily guarded secret. David McClure, author of the book Royal: Legacy How The Royal Family Have Made, Spent, and Passed on Their Wealth told the Washington Post that this information has long been “impenetrable” to outsiders. McClure himself claimed he’s tried to do an investigation on how rich the British royal family truly is, but failed to arrive at a conclusive answer.
Ahead of their wedding, there have been reports that Harry and Meghan are being pressured by the Queen to sign a prenuptial agreement. According to Life & Style(via Hollywood Life), a close friend of Harry’s said he believes the prince will ultimately do whatever his fiancée wants.
Prince Harry and Meghan Markle will tie the knot on May 19, 2018, in St. George’s Chapel in Windsor.