Duke And Duchess Of Sussex

The recent announcement by the Duke and Duchess of Sussex to step back from their ‘senior’ royal status has brought back into focus that the duchess is a US citizen. When their marriage was first announced, several articles raised this, pointing out that, as such, she would still be liable for US tax. This raised concerns that the financial aspects of the royal family could come under the watchful eye of the Internal Revenue Service (IRS).

While this is something of a red herring, nevertheless, marriage between a US citizen and a non-American is quite common in the UK. This ‘split nationality’ of the marriage raises several tax issues that are quite different from a marriage where both parties are the same nationality.

The duchess, as a US citizen, is subject to all US tax laws. Being a member of the royal family provides her with no unique protection (other than sophisticated tax advisers who we can assume she has available to her). Thus, she must file US income tax returns on an annual basis reporting her worldwide income and pay tax on this whether she lives in the UK, Canada or anywhere else. Assuming she is or will become, a UK tax resident (subject to UK tax rules), she may be able to reduce her US tax by any tax she pays here. This would also hold true if she becomes a Canadian resident.
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John Richardson, Tax Advisor

Attention House Ways and Means Committee Members:

I am sending you this submission not as a person who is still a U.S. citizen nor as a person who is attempting to in any way regain his U.S. citizenship. Rather I am sending this to represent the interest of my disabled son who is a U.S. citizen and who is denied the right to renounce his U.S. citizenship because of his disability.

Not only is he not permitted to renounce his citizenship, but I am not permitted to renounce for him because U.S. law requires that the person renouncing be able to understand the gravity of the act. All of which I find rather ironic because while U.S. law requires such understanding when it comes to renouncing, it does not require the same level of understanding when it comes to tax liabilities. This clearly shows how self serving the law is for the U.S. government.

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