How Will Meghan Markle's Finances Change Now that She Married Harry? (Hey Prince, Meet the IRS)

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SOURCE: INVESTOPEDIA

URL: https://www.investopedia.com/insights/how-will-meghan-markles-finances-change-after-she-marries-harry/?utm_source=news-to-use&utm_campaign=bouncex&utm_term=13262778&utm_content=05/18/2018&utm_medium=email

by Amy Fontinelle


The marriage of Meghan Markle and Prince Harry is anything but ordinary. Even among royal marriages it’s unique because Meghan is American – and, like many Americans, she is biracial. But while her race isn’t a issue, her nationality is – thanks to the U.S. tax code.

Prince Harry, Meet the IRS

American citizens like Markle, who was born in Los Angeles, must report their worldwide income to the IRS even while living abroad. (For more, see How to Pay Taxes If You're Overseas.) She will have to file U.S. tax returns and Foreign Bank Accounting Report (FBAR) forms, assuming she becomes the signatory on or holder of accounts worth $10,000 or more. The penalties for not filing FBARs can be harsh and include both fines and possible jail time.

Although Markle has left her acting role as an attorney on the television show “Suits,” she will continue to earn residuals from reruns and DVD sales. But that income is insignificant compared to what she could receive as a member of the royal family. And that’s what will make the couple’s tax situation, and the family’s desire for financial privacy, so tricky to navigate.

Foreign Income Reporting

Markle could have to report to the IRS as income the value of seemingly inconsequential things, such as being lent expensive jewelry, being given a vacation, or living in a Kensington Palace home with her husband. Merely failing to report something she’s required to report, even if it’s not taxable, could result in major tax penalties.

Prince Harry shares with his brother, Prince William, and sister-in-law, Kate Middleton, the Duke and Duchess of Cambridge, an annual allowance that came to £3.5 million ($4.7 million) in 2017. We don’t know if Markle will receive her own allowance or if she will be dependent on Harry’s.

In addition, Prince Harry earns money from a $1 billion portfolio of investment properties called the Duchy of Cornwall that funds his family’s public, charitable and private activities. Together, Prince Harry and the Duke and Duchess of Cambridge received several million from the portfolio in 2017. Prince Harry could also be receiving money from other royal trusts, but such information is not public.

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@mystery-ak
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[kevindavis007]

Well Meghan better renounce her American citizenship if she doesn't want a visit from the IRS. However, it will be quite ironic a that an American Government body wants to take a away money from a British Royal.

[WingNot]

However, it will be quite ironic a that an American Government body wants to take a away money from a British Royal.

Yes It is!  Wars have started over such things!

[Right_in_Virginia]

I'm going to guess the Royals already know this and have firewalls in place to protect both their assets and their existence from the IRS.

What intrigues me is what happens in a Harry-Meghan divorce.  There's no prenup.