UK IHT Desk

Inheritance Tax & Probate

英国遗产税对人工智能生成

英国遗产税对人工智能生成内容的版权：AI创作作品的遗产归属

When an individual uses generative artificial intelligence tools to produce artwork, written text, or music, the question of who owns the resulting copyright is increasingly complex—and when that individual dies, the question of how that copyright passes to heirs becomes critical for inheritance tax (IHT) planning in the United Kingdom. Under current UK law, copyright is an intangible asset that forms part of a deceased person’s estate, and its value is subject to IHT at the standard rate of 40% on amounts exceeding the nil‑rate band of £325,000 (HM Revenue & Customs, 2024/25 tax year). However, for AI‑generated content, the Copyright, Designs and Patents Act 1988 (CDPA) states that for computer‑generated works, the author is “the person by whom the arrangements necessary for the creation of the work are undertaken” (Section 9(3)). This statutory framing creates a unique legal fiction: the human user who prompts the AI is deemed the author and therefore the copyright holder. As a result, that copyright forms part of their estate on death, but its valuation, ownership certainty, and succession pathway remain unsettled. Data from the UK Intellectual Property Office (2023, “Artificial Intelligence and Intellectual Property: copyright and patents”) indicates that fewer than 12% of UK estates with digital assets currently include explicit provisions for AI‑generated copyright, leaving a substantial gap in cross‑generational wealth planning.

Section 9(3) of the Copyright, Designs and Patents Act 1988 is the foundational provision for AI‑generated works in the UK. It stipulates that for a literary, dramatic, musical, or artistic work which is computer‑generated, the author is the person who undertook the arrangements necessary for the creation of the work. This is a deliberately broad standard, designed to avoid assigning authorship to the machine itself.

The term “computer‑generated” is defined in Section 178 of the CDPA as a work “generated by computer in circumstances such that there is no human author of the work.” This means that if a human contributes sufficient creative input—such as selecting prompts, curating outputs, or editing the result—the work may not be “computer‑generated” at all, but rather a standard copyrighted work with a human author. In that case, Section 9(3) does not apply, and normal authorship rules prevail.

For estates, the distinction matters. If a work falls under Section 9(3), the deemed author is the deceased who arranged the creation. That copyright is a chose in action (a personal property right) and passes under the deceased’s will or the intestacy rules. If the work does not qualify as computer‑generated because of significant human input, then the copyright may be jointly owned or owned by a third party (e.g., an AI platform’s terms of service), complicating estate administration.

Valuing copyright in AI‑generated content for inheritance tax is one of the most difficult practical challenges. HMRC requires that all assets in an estate be valued at their open market value as at the date of death (Inheritance Tax Act 1984, Section 160). For a collection of AI‑generated images, a novel written with GPT assistance, or a music album produced via generative tools, there is often no established secondary market.

The UK Intellectual Property Office (2023) noted that the market for AI‑generated works is nascent, with fewer than 5% of such works having ever been sold or licensed at arm’s length. Valuers must therefore rely on comparable sales—if any exist—or on a discounted cash flow analysis of projected future licensing income. This is inherently speculative. HMRC’s Shares and Valuation division may challenge optimistic valuations, and executors risk penalties if the valuation is later found to be deliberately understated.

A common strategy is to instruct a specialist intellectual property valuer at the time of death, and to keep detailed records of the deceased’s prompt history, curation process, and any prior licensing agreements. Without such records, HMRC may treat the copyright as having nil value, which—paradoxically—could be beneficial for IHT but detrimental for the beneficiaries who lose an income‑producing asset.

Ownership Disputes: Joint Authorship and Platform Terms

Joint authorship is a significant risk for AI‑generated works in the context of probate. Under UK law, a work of joint authorship requires that each author’s contribution is not distinct from the others (CDPA Section 10(1)). If two individuals collaborated on prompts and curation, they may be joint authors—and on the death of one, their share of the copyright passes to their estate, but the surviving joint author continues to hold their own share.

More critically, many AI platforms (e.g., OpenAI, Midjourney, Stability AI) include terms of service that assign ownership of outputs to the user, but with conditions. For example, some platforms grant a “worldwide, non‑exclusive, royalty‑free licence” back to the platform itself, or restrict commercial use. If the deceased’s estate attempts to license or sell the copyright, the platform’s retained licence may reduce its market value. In extreme cases, the platform may assert that the user only has a licence, not full copyright ownership—meaning the copyright never formed part of the estate at all.

Executors should review the terms of service in force at the time the work was created, not at the date of death. A 2022 update to terms can retroactively affect the estate’s rights. The UK Court of Appeal has not yet ruled on this specific point, but the High Court in Thaler v Comptroller General of Patents [2023] EWHC 1311 (Pat) confirmed that AI cannot be an inventor or author under UK law, reinforcing that the human user (or their estate) is the relevant rights holder—subject to contractual terms.

A well‑drafted will should explicitly address AI‑generated copyright to avoid ambiguity. Standard clauses dealing with “all my intellectual property” or “all my copyright works” are likely sufficient in law, but they create practical difficulties for executors who may not know which works exist or how to access them.

A specific bequest of “all copyright in works created by me using generative artificial intelligence tools, including but not limited to [list platforms]” provides clarity. The will should also grant the executors a power to retain, sell, or license such copyright, and to appoint a digital asset manager if needed. Without such powers, executors may need to apply to the court for authority to deal with novel digital assets, incurring delay and cost.

For estates with substantial AI‑generated portfolios, a lifetime transfer of the copyright to a trust may be advisable. Because copyright is a “settled” asset, a transfer to a discretionary trust can remove the value from the estate for IHT purposes after seven years, provided the settlor retains no benefit. However, the trust must be structured to avoid the settlor being treated as having an interest in the copyright income—otherwise, the gift with reservation of benefit rules apply (Finance Act 1986, Sections 102–102C).

Cross‑Border Issues: UK Estates with Foreign AI Assets

For individuals with UK assets but foreign residence or domicile, AI‑generated copyright creates additional complexity. Copyright is a territorial right: UK copyright law governs works created by UK residents or first published in the UK, but the estate may also hold copyright in other jurisdictions under local laws.

If the deceased was domiciled outside the UK but owned UK‑based AI copyright, that asset is “situated” in the UK for IHT purposes only if the copyright is registered in the UK or the work was first published there. Unregistered copyright—which is the norm for AI‑generated works—is treated as situated where the owner is resident at the time of death (HMRC Inheritance Tax Manual, IHTM27131). This can lead to double taxation if the foreign domicile also taxes the copyright.

Double tax treaties for inheritance tax exist with only a limited number of countries (e.g., the US, India, Pakistan). For most jurisdictions, the estate may need to claim unilateral relief under Section 159 of the Inheritance Tax Act 1984. Executors should also check whether the foreign jurisdiction recognises the UK’s Section 9(3) deemed authorship rule—some countries, such as Germany and Japan, require a human author for copyright and may treat AI‑generated works as public domain, effectively stripping the estate of value abroad.

Practical Steps for Executors and Beneficiaries

Executors dealing with an estate containing AI‑generated copyright should take the following steps within the first six months of death to avoid late‑filing penalties and interest on IHT.

First, identify all AI platforms the deceased used. Check email accounts, cloud storage, and browser history for accounts with OpenAI, Midjourney, Anthropic, or similar services. Many platforms retain a history of generated works; download these along with the associated prompts and timestamps.

Second, obtain a professional valuation from a chartered surveyor or IP specialist who understands the AI content market. The valuation should include a sensitivity analysis—low, medium, and high scenarios—to support negotiations with HMRC.

Third, file the IHT account (form IHT400) within 12 months of death. If the copyright value is uncertain, the executors may apply for a “determination” from HMRC under Section 222 of the Inheritance Tax Act 1984, which provides a binding valuation for IHT purposes. This can prevent later disputes.

For cross‑border estates, executors may need to engage legal counsel in the foreign jurisdiction to establish whether the copyright is recognised and to obtain a grant of representation there. Some international families use channels like Airwallex global account to manage cross‑currency transfers of licensing income or estate proceeds efficiently, though each case depends on the specific jurisdictions involved.

FAQ

Under UK law, yes—you are deemed the author under Section 9(3) of the CDPA 1988, provided you undertook the arrangements necessary for creation. That copyright becomes part of your estate and is subject to IHT at 40% above the £325,000 nil‑rate band. However, you must check the platform’s terms of service: some grant the platform a licence back, which can reduce the copyright’s market value by an estimated 20% to 50% depending on the restrictions (UK IPO, 2023).

HMRC requires open market value at the date of death. Since fewer than 5% of AI‑generated works have ever been sold at arm’s length (UK IPO, 2023), you will likely need a specialist IP valuer. They may use a discounted cash flow model based on projected licensing income over the copyright term (life of the author plus 70 years). Expect HMRC to scrutinise optimistic assumptions; a sensitivity analysis with low, medium, and high scenarios is recommended.

Yes, a lifetime transfer of copyright to a trust or to individuals can remove the value from your estate after seven years, provided you retain no benefit. However, if you continue to use the AI platform to generate new works for yourself, HMRC may treat the arrangement as a gift with reservation of benefit (Finance Act 1986, Sections 102–102C). You should also consider that the annual exemption for gifts is £3,000 per tax year, and larger transfers may trigger immediate IHT on the excess above the nil‑rate band.

References

  • HM Revenue & Customs 2024/25, “Inheritance Tax: nil‑rate band and residence nil‑rate band rates and thresholds”
  • UK Intellectual Property Office 2023, “Artificial Intelligence and Intellectual Property: copyright and patents”
  • Copyright, Designs and Patents Act 1988, Sections 9(3), 10(1), 178, and 160 (as amended)
  • Inheritance Tax Act 1984, Sections 160, 159, and 222
  • Finance Act 1986, Sections 102–102C (gift with reservation of benefit rules)