GovWire

1. Introduction

The Artists Resale Right (ARR) entitles creators (authors) of original works of art (including paintings, engravings, sculpture and ceramics) to a royalty each time one of their works is resold through an auction house or art market professional.

The right to this royalty is available for the same period as copyright, so applies for the lifetime of an artist and for 70 years following their death.

ARR derives from a European Directive and came into force in the UK in 2006.

2. Calculation of royalties

The right only applies when the sale price reaches or exceeds 1,000 and is calculated on a sliding scale. Royalties are also capped so that the total amount of the royalty paid for any single sale of a work cannot exceed 12,500. The table below sets out the sliding scale of royalty payments.

These price thresholds and royalty payments were introduced by The Design Right, Artists Resale Right and Copyright (Amendment) Regulations 2023 and apply from 1 April 2024.

Prior to 1 April 2024, resale price thresholds and royalty percentages were in euros instead of pounds. For sales prior to 1 April 2024, the right applies to sales prices over 1,000 and royalties are capped at 12,500.

This scale is also cumulative in much the same way as income tax is calculated. For example, the royalty payable for an artwork sold for 200,000 after 1 April 2024 would amount to 6,500. This is made up of:

1st tier 0 to 50,000 will attract a royalty of 4% i.e. 2,000

2nd tier 50,001 will attract a royalty of 3% i.e. 4,500

ARR is exempt of VAT.

3. Collection of royalties

ARR in the UK is managed by collecting societies who then distribute the royalty to the artists. Individual artists cannot request payments directly from the art market professionals involved in the sale.

For more information about the administration of ARR you can contact the Design and Artists Copyright Society (DACS) or Artists Collecting Society (ACS). Frequently asked questions on ARR are answered on the DACS website and the ACS website.

4. Exemptions

Some sales are exempt. For example, where the work being resold was bought directly from the artist less than three years previously and it is being resold for 10,000 (10,000 prior to 1 April 2024) or less. This is generally known as the bought as stock exception.

Sales between private individuals, without the use of an art market professional, or to public, non-profit making museums do not attract royalty payments.

5. Reciprocal resale royalty arrangements with other countries

The UK has entered into a number of Free Trade Agreements (FTAs) which include ARR reciprocal arrangement provisions. These arrangements meanUK nationals receive royalties for qualifying artwork resales in certain countries, listed below. It also means nationals from the countries listed below receive royalties for qualifying artwork resales in the UK.

European Economic Area Countries

The UK has reciprocal ARR arrangements with European Union Member States and EEA EFTA States.The EU- UK Trade and Cooperation Agreement and UK-Iceland, Liechtenstein and Norway FTA includes provisions retaining reciprocal ARR arrangements following the UKs exit from the EU. This means UK nationals continue to benefit from resale royalties in the EEA. EEA nationals also continue to benefit from royalties in the UK on qualifying artwork resales.

Australia

From 31 March 2024 ARR reciprocal arrangements outlined in the UK-Australia FTA are in force. This means artists in both countries will benefit: UK nationals receive royalties on qualifying artwork resales in Australia and vice versa for Australian nationals artwork resales in the UK.

New Zealand

The UK-New Zealand FTA includes an ARR reciprocity provisions meaning UK nationals will benefit from resale royalties in New Zealand in the future.

New Zealand is in the process of adopting an ARR regime domestically. UK and New Zealand governments continue to work together towards establishing reciprocal ARR arrangements between the two countries in due course.