Prince Harry faces a hefty tax bill unless he takes a break from the £ 11m mansion in Los Angeles he’s staying with Meghan and Archie.
- Prince Harry faces a “huge” tax bill if he does not take a break from the palace
- If Harry reaches 183 days in the United States, he is legally responsible for paying taxes there
- Experts say he will have to take a break from his £ 11m mansion next month
Prince Harry could face a “hefty” tax bill unless he takes a break from his £ 11m mansion in California next month, according to experts.
The prince moved to Los Angeles with his wife Megan and their infant son Archie in early May after leaving a rented mansion in Vancouver, Canada, in March.
The couple were first reported in a sprawling Beverly Hills mansion owned by TV producer Tyler Perry on May 7 – meaning that Harry, as of today, has been in the US for at least 151 days. If he reaches 183 days, he is legally responsible for paying taxes there.
David Holtz, the chief tax attorney in Los Angeles, said last night, ‘You can safely assume there is someone in the Internal Revenue Service. [IRS] Seen closely. This is a big deal. ‘
Prince Harry moved to Los Angeles with his wife Megan and their infant son Archie in early May after leaving a rented mansion in Vancouver, Canada, in March.
Harry, 36, faces paying US federal and California taxes under a “significant presence test” that requires any foreigner to spend 183 days in the country within a three-year period to pay US taxes on profits worldwide.
Another tax expert said, “Harry’s bill could be huge and it could open a box of worms for the royal family because the tax authority wants to know all the sources of his income.”
This isn’t just his Netflix deal, but any money he may have received in the form of gifts from Prince Charles and any trust funds, savings accounts, or other assets he has in the UK. This means that the royal books will be open to scrutiny. The American tax man is much more enthusiastic than his British counterpart.
In addition to earning $ 1 million for a speech he gave at an event for JP Morgan in February, Harry and Meghan signed a multi-year deal with the broadcast giant Netflix.
Some reports put the deal’s value at £ 115m, although The Mail on Sunday recognizes it is valued at between $ 3-5 million annually.
The Duke and Duchess of Sussex, who are estimated to have a combined fortune of £ 20 million, live in a mansion in Montecito, California, purchased through a company registered at the title of Meghan’s business manager Andrew Mayer.
Experts say the prince could face a “ huge ” tax bill unless he takes a break from his £ 11m mansion, as he’s legally liable to pay taxes when he’s up to 183 days in the US.
“If Harry has been in the US for 183 days in a row, he’s over,” Holtz said. “But it’s safe to assume that they’ve had lawyers and tax experts dealing with this issue for months.”
The main factor is the type of visa Harry entered the United States. If it is a diplomatic visa, he is exempt, but if it is a 0-1 visa for people with “exceptional capabilities”, he will be liable for the same taxes in the United States as everyone else.
Another accountant said: “ Megan is an American taxpayer and her status has not changed, but Harry has to tell the IRS about every penny he’s earned. This includes paying gift tax on any monetary gifts he received from Prince Charles and will have to show any other source of income including trusts established after Princess Diana’s death.
Meanwhile, Harry last night sent a message of support to those taking part in the London Marathon today as elite athletes compete on the track while another 45,000 runners compete “virtually” on a track of their choice.
He said, “While we will not be together personally, we are together in spirit.” “The astonishing perseverance of runners from all over the world is a reminder of our strength and our sense of community during these difficult times.”
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