Why Meghan Markle’s U.S. Citizenship Could Create Problems For Queen Elizabeth

She’s still a United States citizen even though she is now living in the U.K. and is married to Prince Harry. However, Meghan Markle’s decision to not yet renounce her citizenship from her home country could cause a big headache for the royal family due to the hefty tax bill that could be sent her way by the IRS.

In an interview with CNN (via Express UK) American Tax Return ltd. Founder David Treitel revealed that the way taxation works in the US could force Markle, who is still a U.S. citizen and holds onto a U.S. passport, to pay taxes on income she, as well her baby, make as members of the royal family.

“Ultimately, the tax system in the United States—the law says all income everywhere is taxed unless it’s exempt,” he said. “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 tax could even be collected on royal family heirlooms and jewelry Markle borrows, which may pose a hassle for the Queen when it comes to determining what she allows the Duchess of Sussex to use.

“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, not easy,” he added.

Among the items Markle has already amassed that could count as taxable income are gifts like her wedding ring and the diamond from Princess Diana’s collection that was used in her engagement ring. There is also a possibility that her residence at Frogmore Cottage could also be reported to the U.S. for tax purposes.

This isn’t the first time Markle’s U.S. citizenship has been reported as being somewhat of a potential tax nightmare for the royal family. Prior to her May 2018 wedding, it was revealed that her income could be doubly taxed due to her U.S. citizenship and the fact that she lives in the U.K.