Thursday 22 August 2019

US legislation poses citizenship dilemma for Meghan Markle

US OR THEM: Meghan
US OR THEM: Meghan
Prince Harry, Duke of Sussex and Meghan, Duchess of Sussex attend the Boston Red Sox vs New York Yankees baseball game at London Stadium on June 29, 2019 in London, England. The game is in support of the Invictus Games Foundation. (Photo by Peter Nicholls - WPA Pool/Getty Images)
=Prince Harry, Duke of Sussex and Meghan, Duchess of Sussex attend the Boston Red Sox vs New York Yankees baseball game at London Stadium on June 29, 2019 in London, England. The game is in support of the Invictus Games Foundation. (Photo by Peter Nicholls - WPA Pool/Getty Images)
Prince Harry, Duke of Sussex and Meghan, Duchess of Sussex attend the Boston Red Sox vs New York Yankees baseball game at London Stadium on June 29, 2019 in London, England. The game is in support of the Invictus Games Foundation. (Photo by Peter Nicholls - WPA Pool/Getty Images)
Britain's Prince Harry, Duke of Sussex and Britain's Meghan, Duchess of Sussex arrive on the field prior to the start of the first of a two-game series between the New York Yankees and the Boston Red Sox at London Stadium in Queen Elizabeth Olympic Park, east London on June 29, 2019
Prince Harry, Duke of Sussex and Meghan, Duchess of Sussex attend the Boston Red Sox vs New York Yankees baseball game at London Stadium on June 29, 2019 in London, England. The game is in support of the Invictus Games Foundation. (Photo by Peter Nicholls - WPA Pool/Getty Images)

David Millward

Meghan Markle, Duchess of Sussex, could be barred from re-entering the US in the future if she chooses to renounce her American citizenship.

The US government has started enforcing provisions of 1986 legislation allowing the country to exclude tax "refugees" - Americans who drop their citizenship to avoid paying US tax on earnings they make overseas.

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According to the US State Department, a small number of former Americans have already been barred from re-entering, and the move could present a dilemma for Meghan and her son Archie (who is a dual US-UK citizen) if they choose to become solely British citizens.

A spokesman for the State Department confirmed that renouncing US citizenship for tax purposes were grounds for denying re-entry. The US taxes its citizens irrespective of where they live. Anybody born in the US is classified as a US citizen until they renounce their nationality. This has created a cohort of "accidental Americans" who have been burdened with tax liabilities even if they left the country shortly after they were born.

The biggest financial blow is when an American sells a home.

The profit is taxable and treated separately from other income. One famous victim was current Tory leadership hopeful Boris Johnson, who was born in New York, and had to pay a substantial tax bill on the profit he made on the sale of his home in London in 2014.

Johnson, who left the US at the age of five, renounced his US citizenship in 2016. Even though he was deemed to have done so for tax reasons, he would not face exclusion from the US should he become prime minister, as the provisions do not automatically apply to diplomatic visas.

Britain's Prince Harry, Duke of Sussex and Britain's Meghan, Duchess of Sussex arrive on the field prior to the start of the first of a two-game series between the New York Yankees and the Boston Red Sox at London Stadium in Queen Elizabeth Olympic Park, east London on June 29, 2019
Britain's Prince Harry, Duke of Sussex and Britain's Meghan, Duchess of Sussex arrive on the field prior to the start of the first of a two-game series between the New York Yankees and the Boston Red Sox at London Stadium in Queen Elizabeth Olympic Park, east London on June 29, 2019

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