Prince Harry and Meghan Markle’s recent announcement to return to the UK for an extended period could have significant tax implications. Their six-year absence from the UK places them in a unique position regarding capital gains tax, as they are now beyond the five-year anti-avoidance rule that typically applies to non-residents. This means any profits from asset sales made during their time in the US may not be subject to UK tax upon their return.
Tax experts suggest that while their return is beneficial, it could have been even more advantageous had they stayed abroad for ten years. This longer absence would have allowed them to qualify for additional tax reliefs, potentially saving them substantial amounts on foreign income and gains. However, their current situation still offers them a notable advantage in managing their tax liabilities.
Meghan’s status as a US citizen adds another layer of complexity. The US taxation system requires her to file annual returns regardless of her residency, which could lead to additional tax obligations if her UK earnings are lower than what she would owe in the US. This dual taxation could complicate their financial planning as they navigate their return to the UK.
Furthermore, inheritance tax considerations may influence how long they choose to remain in the UK. To keep her worldwide estate outside the UK inheritance tax net, Meghan must ensure she spends fewer than ten of the previous twenty tax years in Britain, which could impact their long-term residency decisions.
Source: GB News
