According to Business Insider actress Meghan Markle may be double taxed because of US tax.
Hollywood actress Meghan Markle will soon become the newest member of the British royal family, which commands a fortune over $ 500 million. But romping in their riches may cost her extra because of US tax laws.
Markle is a citizen of the United States and is living in the UK on a family visa. As the fiancée of British Prince Harry Markle will have to marry within six months of obtaining the visa to maintain her status.
Markle’s family visa will be effective in 2.5-year increments and she won’t be granted permanent residency until she’s lived in the UK for five years. After that, she can apply for UK citizenship and potentially become a dual citizen of the US and the UK.
All the while, the actress will be filing and perhaps paying US tax to the IRS on any income she makes — regardless of where she earns it.
US citizens, green card holders, and permanent residents are always required to file US tax returns with the IRS every year no matter where they reside. US citizens, including Meghan Markle, must file and subsequentially could get taxed on international income earned outside the US.
The key for Markle and her advisors would be to figure out what type of income she will be getting. Will this income be from the investments of a trust, or ‘wages’ for any work that she does, or any other type of income like priceless ring she got from Prince Harry. Sometimes, getting one form of income is more advantageous than another.
Markle could cause US tax headaches for the royal family. If she becomes a dual US/UK citizen, Markle will have to continue filing her taxes each year with the IRS.
We, the founders of Americans Overseas, were born in the Netherlands and obtained our American nationality through our (American) mother. When we heard about this for the first time around 2013, we were in total disbelief (it can’t be true!), anger (how can they do this?), fear (am I going to get fines or pick up other problems?), and panic (what should I do?). It is (unfortunately) true that there is an additional American tax levy. But there’s no information from local government, and when approached, the consulate referred us to the IRS, and the IRS was impenetrable.
That’s why we started this initiative to help people from all over the world by providing proper information to avoid unnecessary panic, and offering help free of obligation and free of charge. If needed, we have a network of affordable professionals (accountants) who can help you with your tax obligations.
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Source: Business Insider