Meghan Markle has not renounced her US citizenship when she married Prince Harry in May 2018 and will pass on her nationality to her first child when the Royal tot is born later this month. Retaining her US passport could force the Duchess of Sussex and her child to pay a hefty tax bill to the US Inland Revenue Service (IRS) on every item lent to her from the royal collection, including tiaras, necklaces and rings.
American Tax Return Ltd. founder David Treitel told CNN: “Ultimately, the tax system in the United States – the law says all income everywhere is taxed unless it’s exempt.
“Compensation for personal injury is exempt, for example. A few other things are exempt but most income everywhere is taxed so if the baby has income, Meghan has an income they are taxed.”
The prospect of a large bill could put Meghan and Prince Harry in front of the dilemma of whether to renounce her citizenship and deprive their child of a double passport. However, were the Duchess to renounce her nationality, Baby Sussex may still be liable to pay tax returns on any income earned as a member of the Royal Family until they are 18.
Mr Treitel continued: “The Queen has to sit there and her advisors have to sit there thinking ‘what if I lend Meghan a tiara? If I have the baby use a beautiful silver rattle that was used by Queen Victoria?’
“How much is that worth? What’s the value of it? How much should be reported to the state?’ It’s a tough question, it’s not easy.”
Meghan could be forced to report earnings she amassed since joining the Family which would include gifts such as her wedding ring – a present from Queen Elizabeth she had molded from a nugget of Welsh gold – and the diamond from Princess Diana‘s jewelry collection used in her engagement ring.
The Duchess of Sussex may also have to report her multi-million residence on the Windsor Estate, Frogmore Cottage, where she moved with Prince Harry last week to prepare for the arrival of the Royal Baby later this month.
The Duke and the Duchess of Sussex have commissioned renovation works worth £3million to adapt their house of choice in Windsor to their needs.
Among the changes demanded by Meghan and Prince Harry, the documents disclosing most of the proposed changes at Frogmore Cottage suggest that an outbuilding will be turned into a cosy cottage – which may be used by Meghan’s mother when she comes to the UK to see her.
While Doria Ragland seems set to keep on living in her LA home, an insider said she will do back and forth to visit her daughter, son-in-law and grandchild, due within weeks.
The source told the Sunday Mirror Doria is expected to return to Windsor for the first time since Harry and Meghan’s royal wedding in time to see the Duchess giving birth.
They said: “Doria should be here for the birth and will be staying.
“But then she has to get back to her dogs and work.”
Meghan and Harry have recently moved out of the Nottingham Cottage, on the grounds of Kensington Palace, and settled into their new home, just in time to welcome their firstborn.
Other renovation works commissioned by the royal pair are believed to be including a room with a “floating” floor, a feature often used at indoor sports venues built to absorb shocks to reduce injuries, which will likely be used as a yoga room.