Source: Fortune
Summary
Harry and Meghan, the Duke and Duchess of Sussex, are returning to the U.K. after six years in the U.S., potentially missing out on significant tax benefits. Experts say they could have saved millions by staying away for 10 years, which would have provided Foreign Income and Gains relief and inheritance tax advantages. However, their move comes after six years, which avoids the “temporary non-resident” capital gains tax rule. They are moving to a private residence outside London, while keeping their Montecito home in the U.S.
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The numbers tell one story.
Harry and Meghan’s return to the U.K. is a tax decision with mixed outcomes.
They lost potential relief by not waiting 10 years.
But they avoided a temporary non-resident tax hit by leaving after six.
Timing can be everything in tax strategy.
Author: Evan Null
A potential tax upside: skirting the U.K.’s “temporary non-resident” tax hit
The couple’s return to the U.K. after six years of non-residence avoids the temporary non-resident capital gains tax rule. This rule allows the U.K. to tax gains made abroad if someone returns within five years. By staying away for six, they fall outside this rule, potentially saving on taxes. Experts say their timing was strategic for this reason.
The couple’s surprise move back from America to the U.K.
Harry and Meghan’s decision to return to the U.K. was unexpected for many. They left their U.S. home in Montecito to live in a private residence outside London. The move comes after six years of living in California, where they built a media and brand empire. Their return may be influenced by family reconciliation and their children’s schooling.
Harry and Meghan’s financial situation
The couple’s collective fortune is estimated at $60 million, including U.S. investments and assets. By returning to the U.K., they risk subjecting those assets to inheritance tax. Experts say they could have protected their wealth by staying away for 10 years. However, their current move avoids the temporary non-resident tax rule, which could have cost them more.
Public and private life after the move
Harry and Meghan have been living a private life in the U.S., away from the public eye. They have built a media presence through Netflix and Spotify, as well as Meghan’s brand, As Ever. Their return to the U.K. may bring them back into the public spotlight, though they plan to live in a non-royal residence. They are also keeping their Montecito home as a U.S. base.
Family and personal reasons for the move
Harry has expressed a desire to reconcile with his family, and his father, King Charles III, is dealing with a cancer diagnosis. The couple’s recent visit to the royal family at Gloucestershire may have influenced their decision to return. Their children, Archie and Lilibet, are already enrolled in British schools, suggesting a long-term move to the U.K.
