US taxman will be all over the British royal baby

Prince Harry and his wife Meghan Markle. Pic/AFP

New York: Talk about being born with a silver spoon in your mouth: Prince Harry and Meghan Markle's royal baby will have a particularly glittery one. And US tax authorities will be keen to know how much that utensil is worth. That's because the child will have dual nationality: British because of his father and US from his American mother.

"When one of the parents is American and has resided in the US for five years with at least two after the age of 14, the baby is automatically a citizen," said David Treitel, founder of American Tax Returns (ATR), a consultancy for US expatriates living in the UK. "This is the case with Meghan," he said. Meghan and Harry's child will have to show the Internal Revenue Service (IRS) his or her tax status is clean.

From the moment of birth, money deposited in banks by the parents must be duly reported to the taxman. The IRS will demand that any valuable gifts from non-Americans to the baby also be declared as assets. "Imagine the Queen giving the baby beautiful book of art from the royal collection. If the gift is worth over $100,000, it is reportable," said Treitel. But there is a solution: Meghan can renounce her US citizenship. However, even if she does that, tax returns would still have to be filed for the child until age 18.

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