US taxman eyes baby shower bill
THE Duchess of Sussex is facing a massive tax nightmare following her £330,000 baby shower bonanza in New York.
Experts say she must now pay tax on every gift she received worth $15,000 (£11,500) or more. There were plenty of them, from a hand-carved crib to a new designer range of suitcases.
Meghan already faces having to declare her entire 2018/19 income to the United States’s IRS, including “benefits in kind” from royal perks worth hundreds of thousands of pounds.
Like every other US citizen she has 35 days from today to file her annual returns to federal and state authorities in California, her home base before marrying Prince Harry despite spending most of her time filming TV series Suits on location in Toronto, Canada.
The United States is one of the few countries in the world that still taxes its citizens wherever they happen to be and on income derived from any source, including foreign employment.
The Duchess has teams of accountants on both sides of the Atlantic now trying to navigate a financial path through labyrinthine tax laws. Los Angelesbased THE delivery routes of prescription drugs for the Queen and other royals are to be changed in a security review.
Unmarked vans distribute orders to Buckingham Palace, Kensington Palace and other royal households.
But an overhaul revealed that the routes taken from a depository in outer London have remained unchanged for years.
Now security chiefs have recommended that the routes be varied on a daily basis to thwart any
chartered accountant Katherine Welch said yesterday: “Every aspect of Meghan’s income would be under scrutiny – and that would in turn involve opening the books of the Royal Family, which I’m sure they would find unthinkable.
“Sad to say, those delightful baby shower gifts will come under the microscope too because there is a strict ceiling of $15,000 on personal gifts before they become liable to taxation.
“Fortunately, there is no upper limit on the value of gifts spouses attempts at interception. A source said: “We live in a challenging security environment and, of course, terrorism is always high on the list of priorities when it comes to protecting members of the Royal Family.”
The orders carry codenames so they cannot be readily identified as belonging to any individual royal.
Buckingham Palace said it did not comment on security matters.
can give to one another, so anything very personal she has from Prince Harry won’t have to be declared.
“To be honest, given that this is such a unique situation with an American royal living in England, it might eventually take politicians on both sides of the pond to sort this one out rather than accountants.”
Royal accountants have warned the couple that US assessors have been studying the period from their engagement in November 2017 to a month before their wedding in May. They are especially interested in the couple’s mansion Frogmore Cottage in Windsor which could qualify as a benefit in kind for Meghan’s new role as a working royal.
As well as the cost of Frogmore, they will also require details of the loan of their London home at Nottingham Cottage in the grounds of Kensington Palace.
The Duchess’s £10,000-a-time designer outfits and her £1million jewellery collection are also to be examined in forensic detail by IRS experts.
Even the luxury Range Rovers and Audis the couple lease on VIP rentals will come under scrutiny.
One royal financial expert explained: “The IRS’s starting point is that all of these trappings are benefits in kind flowing from her new job. It will be up to her team to explain to them, where they came from and to try to prove the IRS wrong.
“IRS inspectors are notoriously tough and unforgiving. American taxmen will be into everything.
“For instance, if a member of the public could rent a Kensington Palace house, what would it cost? Maybe £10,000 a month, maybe £20,000? That’s the taxable rate no matter what they actually paid for it, if anything. They’ll want to know.”