Buckingham Palace made a deal with Harry and Meghan to stop paying rent while they lived in Frogmore Cottage after the couple paid back £2.4 million in taxpayers’ money used for the renovation
The Duke and Duchess of Sussex have struck a deal with Buckingham Palace not to pay any further rent on Frogmore Cottage after repayment of the £2.4 million taxpayers paid for the refurbishment, The Mail on Sunday can reveal.
It had been reported that the Sussexes would pay a ‘commercial rate’ for the five-bedroom mansion on the Windsor estate. But Palace officials confirmed last night that the lump sum payment wiped out the couple’s rental obligations, as the property’s increased value after work was deemed “rent in lieu.”
It is estimated that the property would cost between £150,000 and £230,000 a year to rent, meaning the Sussexes saved up to £690,000. They will not renew their lease when it expires later this month.
A spokesman for Palace said: ‘The Duke and Duchess of Sussex have contributed £2.4 million to the Sovereign Grant for the refurbishment of Frogmore Cottage. They have fulfilled their financial obligations with regard to the property.
In accordance with standard practice for the Sovereign Grant report, the accounting treatment was scrutinized and approved by the National Audit Office and the Treasury. As with any such agreement between landlord and tenant, further details of the Sussex family leases would be a private matter.”
It had been reported that the Sussexes would pay a ‘commercial rate’ for the five-bedroom mansion on the Windsor estate (pictured)
The Sussexes may have saved up to £690,000 by not paying full rent for Frogmore
The couple is pictured here in the kitchen of Frogmore Cottage
But last night a critic reacted angrily to the making of the deal.
Norman Baker, a former cabinet minister and councilor of state, said: “It is outrageous that Harry and Meghan can live in a huge house on these terms, while ordinary people struggle to put food on the table.” He is now demanding to know how much of the royal family’s property is rented below market price.
Buckingham Palace announced in November 2019 that the Sussexes would have Frogmore Cottage as their official residence. They moved in the following spring after renovations transformed it from a series of separate cottages into one large family home.
But as they pulled out of royal duties to become “financially independent,” Buckingham Palace issued a statement saying it was Harry and Meghan’s wish to repay Sovereign Grant spending for the renovation of Frogmore Cottage, their British family home. will stay’.
They officially ceased royal duties in March 2020 and a spokesman for Palace told the BBC they would continue to pay a ‘commercial rate’ rent on the property.
They even paid five months’ rent, but then gave a lump sum of £2.4 million in September to cover renovation costs. Today we can reveal that a deal was made where the payment wiped out all further financial obligations.
It was not a deal publicly announced by the palace. Nor was it easy to tell by looking at the official Sovereign Grant reports outlining government spending on the monarchy. Last night Buckingham Palace confirmed that the £2.4 million had been split into three headings and registered in two accounts. In the 2020/21 figures, the lump sum is stated as both ‘rental income’ and ‘additions for functions and other income’.
The following year, the third and final portion of the lump sum payment appeared in the accounts as “deferred income under current liabilities.”
A leading accountant, who wished to remain anonymous, analyzed the accounts of The Mail on Sunday.
Meghan is pictured in the episode of the Netflix documentary where the couple moved into Frogmore Cottage before getting Archie
Harry and Meghan in the picture with baby Archie and his grandmother Doria
He said, “This is an accountant’s way of balancing the books. They will look at this deal and say, “Yeah, but value is still being extracted from the lease.” So there must be value visible in the accounts. By allowing the Sussexes to remain at Frogmore Cottage without additional payments, the Crown was giving away value and should recognize it as such. They are using part of the £2.4 million for that.
“That’s why they will have split the payments, to show that value is coming back to the estate according to the lease the Sussexes will have signed.”
The royal family is financed with public money from the government, the so-called Sovereign Grant. The system was introduced in April 2012 to replace the old Civil List and requires the Royal House to publish a full annual report on public finances. As with other government expenditures, they are audited by the National Audit Office and the Public Accounts Commission.
The Royal House has said it is ‘committed to making the royal finances as transparent as possible’.