Trustee Charging Clause UK (2026): When Can a Trustee Charge for Their Services and What Does the Trustee Act 2000 Say?

The general rule at common law is that a trustee CANNOT charge for their time and services in acting as trustee, unless there is an express power to do so in the trust deed or the power is conferred by statute: (1) THE TRUSTEE AS UNPAID VOLUNTEER: the traditional equitable principle is that a trustee acts as a volunteer — they hold office for the benefit of the beneficiaries without remuneration. The equitable rule against trustees profiting from their position (the self-dealing rule and the no-profit rule) prevents a trustee from charging for work done in administering the trust; (2) THE RULE APPLIES EVEN TO PROFESSIONAL TRUSTEES AT COMMON LAW: even a professional trustee (a solicitor, accountant, or bank) who acts as trustee cannot charge for services rendered in the course of their professional practice, unless there is an express power to charge in the trust deed — or unless the Trustee Act 2000 s.29 applies; (3) THE RESULT WITHOUT A CHARGING CLAUSE: a solicitor appointed as executor and trustee under a will, with no charging clause in the will, would be entitled to recover only their out-of-pocket EXPENSES (disbursements) — not their time. This would be commercially unworkable. In practice, solicitors either: (a) insist on a charging clause in the will before they agree to act; or (b) charge as attorneys advising the executors rather than as executors themselves; (4) WHAT CAN ALWAYS BE CLAIMED: regardless of whether there is a charging clause, ALL trustees can claim REIMBURSEMENT OF OUT-OF-POCKET EXPENSES incurred in the course of trust administration — for example, professional fees paid to third parties, registration fees, postage, travel costs. This is reimbursement of expenses, not remuneration; (5) STATUTORY MODIFICATION — TRUSTEE ACT 2000 s.29: the Trustee Act 2000 introduced a statutory right to charge for certain professional trustees. This is discussed in the next question.

Section 29 of the Trustee Act 2000 introduced a statutory right to reasonable remuneration for certain professional trustees, reducing (but not eliminating) the need for an express charging clause: (1) THE S.29 ENTITLEMENT: under s.29(1), a trustee who acts in a PROFESSIONAL CAPACITY is entitled to receive REASONABLE REMUNERATION from the trust funds for services provided to or on behalf of the trust — IF each co-trustee has AGREED in writing to the trustee charging reasonable remuneration; (2) WHO IS A TRUSTEE ACTING IN A 'PROFESSIONAL CAPACITY': under s.29(5), a person acts in a professional capacity if they act in the course of a profession or business which consists of or includes the provision of services in connection with the management or administration of trusts; trusts or the execution of wills or estates; the management of investment portfolios; or similar work. This covers: (a) solicitors and barristers; (b) accountants; (c) financial advisers; (d) professional trust companies (trust corporations); (3) THE CO-TRUSTEE AGREEMENT REQUIREMENT: the key limitation of s.29 is that EACH CO-TRUSTEE must agree in writing to the remuneration. This means: (a) s.29 only applies where there is more than one trustee; (b) a professional trustee acting as sole trustee CANNOT charge under s.29 — they need an express charging clause; (c) lay co-trustees must agree in writing to the professional's charges before s.29 applies; (4) WHAT IS 'REASONABLE REMUNERATION': under s.28(4), reasonable remuneration means 'such remuneration as is reasonable in the circumstances for the provision of those services' — typically the professional's normal hourly rates; (5) CHARITABLE TRUSTS — s.29(3): for charitable trusts, the requirements are more stringent — the Charity Commission must consent or the trust deed must authorise remuneration; (6) SOLE PROFESSIONAL TRUSTEE — EXPRESS CLAUSE STILL NEEDED: because s.29 requires co-trustee agreement, a professional trustee who is appointed as SOLE TRUSTEE (which is common with professional trust companies) still needs an express charging clause in the trust deed.

An express charging clause is the most reliable way to authorise trustee remuneration. Key drafting points are: (1) THE STANDARD FORM IN A WILL: a typical charging clause in a professionally drafted will reads: 'Any trustee of this will who is engaged in a profession or business shall be entitled to be paid all usual professional and business charges for work done by them or their firm in connection with the administration of my estate and the trusts of this will, including work which a trustee not engaged in a profession or business could have done personally'; (2) THE KEY ELEMENTS OF A CHARGING CLAUSE: (a) SCOPE: 'all usual professional and business charges' — covers time, skill, and expertise as well as disbursements; (b) FIRM: 'by them or their firm' — allows the professional to use colleagues or staff without losing the right to charge at firm rates; (c) LAY TRUSTEE WORK COVERED: 'including work which a lay trustee could have done personally' — without this phrase, there is an argument that a professional trustee can only charge for work requiring professional skill, not for routine administration tasks that any trustee could perform. This argument arises from Dalgety v Turnbull (1838) and was affirmed in Re Chapple (1884) 27 Ch D 584; (3) QUANTIFICATION OF CHARGES: some charging clauses specify a rate or formula — e.g. 'reasonable hourly rates as notified to the beneficiaries'. Others simply refer to 'usual professional and business charges'. Courts will interpret 'usual' charges as the professional's normal market rate for comparable work; (4) CHARGING CLAUSES IN TRUST DEEDS — INTER VIVOS TRUSTS: for an inter vivos (lifetime) trust, the charging clause should appear in the trust deed. It should also specify whether the power is CONFINED to the original trustee or extends to all successor trustees (it should normally extend to all successor professional trustees); (5) COURT AUTHORISATION: where there is no charging clause and s.29 does not apply, a trustee can apply to the court for authorisation to charge under the court's inherent jurisdiction or under the Trustee Act 1925 s.57 (expedient transactions). The court will consider the value brought to the trust and the circumstances. This route is slow and expensive — an express charging clause is always preferable.

A LAY TRUSTEE (someone who is not a professional) cannot charge for their time and services in the absence of an express charging clause — even if the administration is extremely burdensome. However, there are some alternatives and protections: (1) LAY TRUSTEE — NO REMUNERATION WITHOUT EXPRESS AUTHORITY: a lay trustee (e.g. a family member appointed as executor and trustee) acting in a personal capacity has NO right to charge for their time. The equitable no-profit rule applies absolutely to lay trustees in the absence of an express charging clause; (2) EXPENSES ARE ALWAYS RECOVERABLE: a lay trustee can ALWAYS recover actual out-of-pocket expenses incurred in administering the trust — for example: (a) travel costs to meet with advisers or beneficiaries; (b) court fees and registration fees paid to Land Registry, OPG etc.; (c) printing and postage costs; (d) professional fees paid to solicitors, valuers, accountants etc. on behalf of the trust; These are EXPENSES, not remuneration; (3) THE PRACTICAL APPROACH — HIRE PROFESSIONALS AND CHARGE THE ESTATE: in practice, lay executors and trustees delegate complex work (probate, conveyancing, IHT returns, trust accounts) to professional advisers. The professional's fees are charged to the estate as expenses — the lay trustee does not personally charge, but the estate bears the cost of the professional work; (4) ALL BENEFICIARIES CAN AGREE TO PAY: if ALL the beneficiaries are adult, have full capacity, and agree in writing, they can collectively agree to pay a lay trustee reasonable remuneration for their time. This is not a right under statute — it is a consensual arrangement. It is the Saunders v Vautier principle applied to remuneration; (5) COURT AUTHORISATION: as noted above, the court can authorise payment to a trustee under its inherent jurisdiction or TA 1925 s.57 in exceptional circumstances where the trustee has provided exceptional services that substantially benefited the trust; (6) INHERITANCE — WHERE THE TRUSTEE IS ALSO A BENEFICIARY: where a trustee is also a residuary beneficiary of the estate, any payment to them for their trustee services that is not authorised by the trust deed will be treated as a pre-payment of their legacy — not as remuneration.

A trustee who takes remuneration from trust funds without authority commits a BREACH OF TRUST: (1) THE BREACH: taking unauthorised remuneration from trust funds is a breach of the equitable no-profit rule and the fiduciary duty of loyalty. It is a breach of trust regardless of whether the trustee acted in good faith — the equitable principle is absolute. As Millett LJ stated in Armitage v Nurse [1998] Ch 241 (CA): 'Every breach of a duty of a fiduciary is a breach of trust'; (2) THE REMEDY — ACCOUNT OF PROFITS: the primary remedy for a trustee who has charged without authority is an ACCOUNT OF PROFITS — the trustee must repay to the trust fund every penny charged, plus interest. Unlike equitable compensation for loss (which requires causation), the account of profits remedy requires the trustee to disgorge the profit regardless of whether the trust has suffered any loss; (3) TRUSTEE ACT 1925 s.61 — RELIEF: the court can relieve the trustee from liability under TA 1925 s.61 if the trustee acted honestly and reasonably — see the guide on trustee liability for breach of trust. However, s.61 may be harder to invoke in cases of dishonest enrichment, even if the amount was 'reasonable'; (4) LIMITATION PERIOD: the limitation period for an account of profits against a trustee is governed by the Limitation Act 1980 s.21. For honest breach: 6 years from the date of the breach. For fraudulent breach: no limitation period (s.21(1)(a)); (5) PRACTICAL LESSON — ALWAYS INCLUDE A CHARGING CLAUSE IN PROFESSIONALLY DRAFTED WILLS: any will that appoints a professional as executor or trustee should ALWAYS include a properly drafted charging clause. Failure to include a charging clause is a professional failing by the solicitor who drafted the will — and may itself constitute professional negligence (Wills Act 1837; White v Jones [1995] AC 207).