Prince Harry and Meghan Markle are returning to the UK with their children, Prince Archie and Princess Lilibet, after six years living in the United States. The move has sparked plenty of speculation about family ties, security and the couple’s future in Britain. But there is another, less glamorous question worth examining: tax.
Harry and Meghan’s return could have important UK tax consequences, particularly around Capital Gains Tax (CGT) and the country’s rules for people who leave Britain and later return. However, the oft-repeated claim that their six years in the U.S. automatically means they can avoid UK tax on assets sold during that period needs an important qualification.
The real story is more nuanced — and the difference between five years and 10 years could potentially be significant.
Why are Prince Harry and Meghan returning to the UK?
The Duke and Duchess of Sussex are expected to return to Britain later this month for an extended period, six years after stepping back from royal duties and relocating to California.
Their children are reportedly set to attend school in the UK from September. The family is expected to live in a private, non-royal residence outside London rather than return to official royal life. Reuters reports that Harry and Meghan will remain private, non-working members of the Royal Family.
The move does not mean Harry and Meghan are becoming working royals again. Instead, it appears to be a private relocation centered partly on their children’s education and Harry’s continuing links to Britain.
That distinction matters for tax purposes because UK tax residence, rather than royal status, is the key issue.
What is capital gains tax, and why does it matter?
Capital gains tax is generally charged when an individual makes a taxable gain by disposing of an asset that has increased in value.
For example, imagine someone buys shares for $1 million and later sells them for $1.5 million. The $500,000 increase is broadly the capital gain, subject to the applicable tax rules, exemptions and deductions.
For UK tax purposes, residence is particularly important.
HM Revenue & Customs says UK residents are generally subject to UK tax on their UK and foreign gains, while non-residents are generally subject to CGT on UK property and land and, in some circumstances, under special rules when they return to Britain.
That is where Harry and Meghan’s six years in America become relevant.
Could Harry and Meghan benefit from the UK’s five-year temporary non-residence rule?
Potentially, but it is not as simple as saying that six years abroad makes all U.S. asset sales tax-free in Britain.
The UK has what HMRC calls the temporary non-residence rules. They are designed to prevent someone from leaving Britain for a short period, realising gains while abroad and then returning without those gains ever being brought into the UK tax net.
Under the rules, certain gains realised during a period of temporary non-residence can become taxable when the individual returns to the UK. HMRC’s current guidance generally looks at whether the individual’s period of non-residence was no more than five years, alongside other residence conditions.
HMRC gives a straightforward example: an individual who leaves the UK, realises a gain while abroad and returns within the relevant five-year period may have that gain brought into charge in the year of return.
The rule exists precisely because otherwise someone could potentially use a temporary move abroad as a tax planning opportunity.
So does six years solve the problem?
Not automatically, but it can be important.
HMRC’s 2026 guidance says that an individual who ceased to be UK resident in 2019-20 or earlier and does not become UK resident again until 2025-26 will not fall within the temporary non-residence rules described there.
That illustrates why the length of an individual’s absence matters.
If Harry or Meghan’s particular UK tax-residence history satisfies the relevant conditions and their return falls outside the temporary non-residence rules, certain gains realised while they were genuinely non-UK residents may not subsequently be taxed in Britain under those rules.
But this should not be interpreted as a blanket exemption covering every asset they sold in America.
Their individual tax positions would depend on factors including:
- Their UK tax residence before leaving Britain.
- The exact dates on which they ceased and resumed UK tax residence.
- Whether either of them satisfies the statutory residence conditions.
- The nature and location of the assets sold.
- When those assets were acquired and disposed of.
- Whether separate UK rules apply to the particular asset.
- Any applicable U.S. tax obligations or treaty considerations.
In other words, the six-year timeline may be significant, but it is not itself a tax holiday.
What happens to UK property and other assets?
There is another important wrinkle.
Being a non-UK resident does not mean an individual is completely outside the UK’s CGT system.
For example, non-residents can still face UK CGT on disposals of UK property or land. HMRC says this can include residential and commercial property and certain indirect interests deriving their value from UK land.
That means the idea that Harry and Meghan’s years in California put all of their wealth outside the reach of UK taxation would be misleading.
The tax treatment depends heavily on what the asset is and when it was sold.
Why six years away is not enough for the bigger tax break
This is where the story gets particularly interesting.
Since April 2025, Britain has operated a new Foreign Income and Gains (FIG) regime, replacing the previous remittance-basis system.
The new regime can provide substantial relief to certain people who become UK tax residents after spending a sufficiently long period outside Britain.
But the threshold is not five years.
It is 10 consecutive tax years of non-UK residence.
HMRC states that an individual can qualify for the FIG regime if they become UK tax resident after at least 10 consecutive tax years as a non-UK resident. A qualifying individual can then claim relief on eligible foreign income and gains during their first four years of UK residence. (GOV.UK)
That is a very different proposition from the temporary non-residence rules.
What would the FIG regime mean?
In simplified terms, imagine an individual spends 12 years living outside Britain before returning.
If they meet all the conditions, they could potentially claim the FIG regime during their first four tax years back in the UK.
Eligible foreign income and gains arising during those years can receive UK tax relief if the individual makes the required claim. (GOV.UK)
The regime covers certain types of foreign income and gains, including qualifying foreign investment income and gains, subject to its detailed rules.
But there is a trade-off: someone claiming the regime gives up entitlement to certain personal allowances and the CGT annual exempt amount for the relevant year.
Why Harry and Meghan reportedly miss out on the four-year FIG regime
This is perhaps the most important tax distinction in the story.
Harry and Meghan have spent roughly six years in the United States, not 10 consecutive tax years outside the UK.
Therefore, based solely on the reported six-year absence, they would not satisfy the 10-year prior non-residence requirement for the new FIG regime.
HMRC explicitly states that the FIG regime is available only to qualifying new residents following at least 10 consecutive tax years of non-UK residence.
So while the length of their U.S. stay may potentially keep certain gains outside the temporary non-residence rules, it is also too short to unlock the much broader four-year FIG relief.
That creates an unusual tax contrast:
| UK tax rule | Relevant period | Potential effect |
|---|---|---|
| Temporary non-residence rules | Generally up to 5 years | Can bring certain gains realized abroad into UK tax when a person returns |
| Harry and Meghan’s reported absence | About 6 years | May place them outside those temporary non-residence rules, depending on their individual facts |
| FIG regime | At least 10 consecutive tax years outside the UK | Potential relief on eligible foreign income and gains for first 4 UK-resident years |
| Their reported absence vs. FIG threshold | About 6 years vs. 10 years | Not long enough for FIG eligibility |
Could their return actually increase their tax bill?
Yes.
Once Harry and Meghan become UK tax residents, the picture changes substantially.
The UK generally taxes residents on their worldwide income and gains. HMRC’s current guidance says the arising basis applies to UK residents, subject to the specific reliefs and regimes available to them.
That could mean future income and gains connected to their international activities become relevant to UK taxation.
The couple also reportedly intend to retain their California property while continuing their commercial and philanthropic activities. The Associated Press reports that Meghan plans to operate her business, As Ever, from the UK, while Harry continues his charitable work.
That makes their eventual tax position more complicated than simply asking whether they owe CGT on something they sold while living in California.
Does their reported $60 million fortune change the analysis?
Not directly.
Various media reports have put the Sussexes’ combined wealth at around $60 million, although private net-worth estimates are inherently difficult to verify and should not be treated as official financial disclosures.
More importantly, net worth is not the same thing as taxable gain.
Someone can have a $60 million net worth without having a $60 million taxable capital gain. Tax generally depends on the particular income, asset, gain, transaction and applicable rules.
That distinction is especially important when discussing celebrity finances, where reported wealth figures often combine inherited assets, property values, investments and commercial earnings.
What does the six-year absence really mean?
The simplest way to understand the situation is this:
Harry and Meghan’s six years in America may help them in one part of the UK’s tax system while leaving them short of a much larger relief available under another.
Their absence could potentially put them outside the temporary non-residence rules that can bring certain gains realized abroad back into UK taxation when someone returns after a short absence. But that does not mean every gain they realized while living in the U.S. is automatically exempt.
At the same time, six years is well short of the 10 consecutive tax years required to qualify for the new FIG regime.
So the tax story is less “Harry and Meghan found a multimillion-dollar loophole” and more “their timing may matter, but the details will determine the outcome.”
The bottom line
Harry and Meghan’s return to Britain could have meaningful tax consequences, but the headlines need some careful unpacking.
The five-year temporary non-residence rules and the 10-year FIG requirement serve very different purposes.
Their reported six-year absence may mean the temporary non-residence rules do not apply to certain gains, provided their individual residence history satisfies the statutory conditions. HMRC confirms that people outside those rules do not face an additional UK CGT charge merely because they return.
But they have not been away long enough to qualify for the new four-year FIG regime, which requires at least 10 consecutive tax years of non-UK residence before returning as a UK resident.
And once they become UK residents, their future worldwide income and gains may once again fall within the UK’s tax framework.
For the Sussexes, then, six years may be a significant number, but it is not a magic number.
