Trust Planning Entertainers With Global Income: US-UK Guide

Trust and Inheritance Planning for Entertainers With Global Income

The trust planning for entertainers with global income needs to solve one hard problem: the money keeps arriving long after the artist has gone. Copyrights, master recordings, and publishing rights pay out for the life of the author plus 70 years, so an entertainer’s estate is rarely settled at death. Left unstructured, that future income stream is taxed at 40% on both sides of the Atlantic.

Where does trust planning for entertainers with global income begin?

An entertainer’s balance sheet looks nothing like a business owner’s. Most of the value sits in intangible property that outlives the person who created it: song copyrights and publishing rights, master recordings, image and brand rights, name-and-likeness deals, and back-catalog royalties licensed across streaming, film, advertising and merchandise. Intellectual property does not stop earning when the artist dies. Under both US and UK copyright law, it continues to generate income for 70 years after death, which is exactly why trust planning for entertainers with global income cannot be treated as an afterthought bolted on in later life.

The starting question is ownership, not tax. Who holds the copyright today — the artist personally, a loan-out company, or a family trust? Where is that entity resident? Which country will assert taxing rights on the royalty when it is paid, and which will tax the asset when it passes at death? Answering those questions early lets you move an appreciating catalog out of your taxable estate while it is still worth relatively little. Our note on US tax for athletes and entertainers sets out how performance and royalty income are sourced before any estate planning begins.

How does the US estate tax apply to an entertainer’s global royalties?

The United States taxes the worldwide estate of every US citizen and every green card holder, wherever they live and wherever their assets are located. A British singer who spent a decade touring the US, took a green card, and never formally surrendered it is inside that net. The rate is a flat 40% on the value above the exclusion amount, and the IRS estate tax rules treat a music catalog as an asset to be valued and taxed like any other.

For 2025, the lifetime exclusion is $13.99 million per person. From 1 January 2026, the One Big Beautiful Bill Act raised it permanently to $15 million per individual — $30 million for a married couple — indexed for inflation thereafter.

 That sounds generous until you consider the value of a hit catalog. A song portfolio generating strong annual streaming and sync income can be appraised at tens of millions, and the entire excess is taxed at 40%. The estate must file Form 706 and pay the tax within 9 months of death — in cash. Royalties are illiquid; you cannot post a master recording to the IRS. Families are forced into fire sales of catalog rights at exactly the wrong moment to raise taxes.

US transfer-tax tools at a glance

Which structures move a catalog out of your estate early?

The core move is to gift appreciating rights while they are cheap. A grantor retained annuity trust (GRAT) lets an artist transfer royalty interests into trust, take back an annuity, and pass all future growth to the next generation free of gift tax if the catalog outperforms the IRS hurdle rate. An intentionally defective grantor trust (IDGT) goes further: the artist sells catalog interests to the trust at a supportable discounted valuation, freezing today’s value in the estate while every future streaming dividend accrues outside it. 

Well-run trust planning combines global income with a dynasty trust that applies the generation-skipping transfer (GST) exemption, keeping the rights productive across children and grandchildren without a fresh 40% charge at each death.

Liquidity is the other half of the plan. An irrevocable life insurance trust (ILIT) holds a policy outside the estate, so the death benefit — untaxed — lands just as the 706 bill falls due, sparing the family a forced catalog sale. Our guide to the ILIT life insurance trust walks through how the policy is owned and funded.

 Where an artist wants a philanthropic legacy, a charitable remainder trust can take a catalog, pay the artist an income for life, and direct the remainder to a foundation. If a sale is on the table instead, read our note on the implications of selling a music catalog before signing, because the estate and income-tax outcomes diverge sharply.

What changed for UK inheritance tax after April 2025?

The UK charges inheritance tax (IHT) at 40% on the estate above the £325,000 nil-rate band, with a further £175,000 residence nil-rate band where a home passes to direct descendants. On top sits the biggest reform in a generation. From 6 April 2025, the old domicile test was scrapped, and IHT became residence-based: an individual who has been UK tax resident for at least 10 of the previous 20 years is a “long-term resident” and is subject to UK IHT on their worldwide assets, including the catalog. 

The GOV.UK inheritance tax guidance and HMRC’s paper on reforming the taxation of non-UK-domiciled individuals set out the new footing.

The reform also closed the excluded-property trust route that non-doms once used to keep foreign assets outside IHT. Where a settlor is a long-term resident, non-UK assets held in trust now fall into the relevant property regime, exposing the trust to a charge of up to 6% on each tenth anniversary, plus exit charges when value leaves.

 An artist who set up an offshore trust for a catalog in calmer times may now be funding a periodic UK charge they never budgeted for — a live reason to revisit older structures rather than assume they still work.

Image and name-and-likeness rights deserve their own line in the plan. Post-mortem publicity rights vary sharply by jurisdiction: some US states recognize a descendible right of publicity that keeps a performer’s likeness commercially valuable for decades, while the UK protects the same interest only indirectly through trademarks, passing off, and copyright in specific images.

 An entertainer whose face still sells merchandise and sync placements after death holds an asset that must be identified, valued, and assigned to a trust in life. Otherwise, it lands in the estate uncontrolled, taxed on an estimate the family cannot easily challenge, and licensed by executors with no mandate for the artist’s brand.

What cross-border traps hit entertainers with foreign trusts?

Dual exposure is the defining risk. A US citizen resident in London can face both a 40% US estate tax and a 40% UK IHT on the same estate. The US-UK estate and gift tax treaty exists to relieve that double charge through situs rules and credits, but it is not automatic — it must be claimed correctly, and getting the sourcing wrong leaves value taxed twice. Our explainer on the US-UK estate tax treaty shows how the tie-breakers apply to intangible IP.

Four traps recur.

 First, US beneficiaries of a foreign (non-US) trust face the punitive throwback rules on accumulated income and must file Form 3520, with the trustee filing Form 3520-A — miss it, and penalties start at 35% of the transfer; our foreign trust reporting guide covers the mechanics. Second, a non-U.S. citizen spouse does not get the unlimited marital deduction, so assets must pass through a qualifying domestic trust (QDOT) under IRC §2056A to defer the estate tax. 

Third, a loan-out or music company held offshore is a controlled foreign corporation that drags in Form 5471 reporting and can trip UK IR35. In contrast, foreign funds in a trust portfolio are often PFICs that are taxed harshly to US beneficiaries. Fourth, valuing future royalties by discounted cash flow invites IRS scrutiny — an aggressive appraisal is where audits begin.

Case study: a songwriter between Nashville and London

Maya is a US-born singer-songwriter who moved to London in 2016 and married a British non-US citizen. She owns her publishing catalog personally and holds her master recordings through a UK loan-out company. By 2026, she will have been a UK resident for so many years that she will be a long-term resident subject to UK IHT on worldwide assets — and, as a US citizen, she will remain within the US estate net.

 Her catalog is appraised at £18 million. Without planning, the same asset incurred a 40% charge in both countries, with only the treaty standing between her family and a double hit; the loan-out shares triggered Form 5471, and her husband’s lack of US citizenship meant there was no marital deduction.

We rebuilt the structure. Her publishing rights were sold to an IDGT at a supported valuation, freezing today’s figure and moving future streaming growth out of her US estate. A dynasty trust with GST allocation holds the interest for her children. An ILIT funds a dollar policy to cover any residual 706 liability in cash.

 A QDOT was drafted to receive the marital share, so the US estate tax is deferred until her husband’s death rather than falling due immediately, and the treaty credit was mapped against the UK charge. The catalog keeps paying — now inside a structure built to survive her.

Work with Jungle Tax

Getting trust planning entertainers with global income right is a specialist, dual-system job — one wrong situs call or missed 3520 can cost more than the planning ever saved. Jungle Tax builds and reviews cross-border trust and estate structures for artists, writers, and performers on both sides of the Atlantic. Speak to our team at hello@jungletax.co.uk | 0333 880 7974 | jungletax.co.uk.