Harry and Meghan, the Duke and Duchess of Sussex, are returning to the U.K. after living in the U.S. for the past six years. They’re moving from their Montecito mansion to a private residence outside of London, but the timing of their surprise homecoming could mean they miss out on tax breaks. Experts say that they’re leaving potential savings on the table, which could be worth millions.
“Whilst their return is welcome news, staying away a bit longer would have given them a much better tax result,” Dhana Sabanathan, leading partner in the tax, trusts and succession team at national law firm Michelmores, tells Fortune.
Under certain U.K. tax rules, the couple forgoes major benefits by returning home. Because Harry spent only six years away, he missed two key tax advantages tied to a 10-year non-residence period: four years of Foreign Income and Gains (FIG) relief, and the inheritance-tax advantages available to someone who has broken their long-term U.K. residency. For example, if their U.S.-based investments grew in value and they sold them after returning to England, they could have sold those investments and brought the money into the U.K. without owing U.K. tax on those qualifying foreign gains, under the FIG regime. Now, his qualifying foreign income or investment gains could be subject to U.K. tax.
