Can an Executor Charge a Fee? Your Rights as Executor

Administering an estate can take hundreds of hours of work — dealing with banks, HMRC, solicitors, property sales, and beneficiary queries. Many lay executors are surprised to discover that despite this effort, they have no automatic legal right to charge. This guide explains the rules clearly, including how to ensure payment is legally sound if the family wants to compensate a lay executor.

The Default Rule: Lay Executors Cannot Charge

The default position in English and Welsh law is that the office of executor is a gratuitous one. An executor appointed under a will is expected to carry out their duties without payment, unless the will itself authorises remuneration. This has been the legal position for centuries and is reinforced by case law.

The rationale is that the executor is usually a trusted friend or family member of the deceased, who chose them for personal reasons rather than professional expertise. The law therefore does not presume that payment was intended — that must be expressed clearly in the will.

This does not mean an executor receives nothing from the estate. Executors are entitled to be reimbursed for all reasonable out-of-pocket expenses incurred in administering the estate — postage, travel to meet solicitors or visit properties, court fees, publication costs for the section 27 notice, and so on. Expenses reimbursement is different from remuneration for time.

An executor who unilaterally deducts a fee from the estate without legal authority could face a claim by the beneficiaries for the return of that amount, plus interest.

Professional Executors: Charging Under the Trustee Act 2000

The position is different for professional executors — typically solicitors, accountants, banks, and trust corporations. Under section 29 of the Trustee Act 2000, a professional trustee or executor is entitled to receive reasonable remuneration for their services, even if the will does not contain a charging clause, provided:

• The executor is acting in a professional capacity (i.e. the services are those that a lay executor could not reasonably be expected to provide without charge), and
• The other trustees (if any) agree in writing to the remuneration, or the will itself provides for it

In practice, solicitors and banks appointed as executor will always have a written fee agreement in place — either through a charging clause in the will or through a separate retainer letter. Their fees are charged at their normal professional rates and are payable as an expense of the estate, before distribution to beneficiaries.

A solicitor acting as executor must be transparent about their charging rates at the outset. The Solicitors Regulation Authority (SRA) requires solicitors to provide a costs estimate at the start of any matter, including estate administration. If you are a beneficiary and are concerned about professional executor fees, you are entitled to ask for a breakdown.

Charging Clauses in Wills: What They Look Like

A will can expressly authorise an executor to charge for their time. Such a provision is called a charging clause. A typical charging clause reads something like:

“Any executor or trustee of this will who is engaged in a profession or business may charge and be paid all reasonable fees and expenses for work done by them or their firm in connection with the administration of my estate, even if that work could have been done by a lay person.”

Some charging clauses are broader — authorising any executor (not just a professional) to charge at a specified rate or on a time basis. Whether a lay executor can charge depends on the precise wording.

Key questions when interpreting a charging clause:

• Does it apply to lay executors or only professional ones? Many standard charging clauses are written specifically for professional executors only.
• Does it apply to all work or only to work of a professional nature? A clause limited to “professional services” does not authorise charges for routine administration tasks.
• Is there a rate specified or is it simply “reasonable remuneration”? Without a specified rate, any charge must be reasonable in all the circumstances.

If you are uncertain whether a charging clause covers your situation, take legal advice before deducting any fees from the estate.

Ex Gratia Payments: When All Beneficiaries Agree

Where there is no charging clause in the will and the executor is not a professional, the beneficiaries can unanimously agree to pay the executor a voluntary payment — known as an ex gratia payment. For this to be valid:

• All adult beneficiaries with a vested interest in the estate must consent. If any beneficiary objects, or if any beneficiary is a minor, the arrangement cannot proceed without court approval.
• The agreement must be genuinely voluntary — no beneficiary should feel pressured to consent.
• The agreement should be recorded in writing, signed by all consenting beneficiaries, and retained with the estate papers.
• The amount agreed must be reasonable in the circumstances — the nature of the work done, the size and complexity of the estate, and the amount of time spent.

An ex gratia payment is not deductible from the estate for inheritance tax purposes — it is treated as a gift from the beneficiaries to the executor, not as an administration expense. This is an important difference from professional executor fees, which are a legitimate deductible expense.

Income Tax on Executor Fees

The tax treatment of executor fees depends on whether the executor is acting in a professional or personal capacity:

• Professional executor (solicitor, accountant, bank):Fees received in a professional capacity are taxed as professional income — subject to income tax and potentially VAT (if the professional is VAT-registered). The fee is an ordinary business receipt, reported on the professional’s self-assessment return or as part of their firm’s accounts.
• Lay executor receiving an ex gratia payment:HMRC’s position is that where a lay executor receives a payment for administering an estate as a one-off matter, it is unlikely to be taxable as employment or trading income — it is more akin to a gift. However, if a lay executor regularly undertakes estate administration for payment (making it a systematic activity), HMRC may treat it as trading income.
• Expenses reimbursement: Genuine reimbursement of out-of-pocket expenses is not taxable income — it is simply the return of money the executor has spent.

If you are in any doubt about the tax treatment of payments you receive as executor, particularly if the amounts are significant, seek advice from a tax adviser or accountant. An inadvertent failure to report taxable income can result in penalties.