Cultural objects over fifty years old need a licence to leave the UK. The resale royalty stops at £12,500.

Two rules apply to the same sale and answer different questions. The export control decides whether an object may leave the country. The resale right decides what the artist is owed when the work is sold. Both are fixed by statute. Neither is a tax.

Published by ArtisDomus, written by Polina Surina.

The export control is a ban, with licences as the way through it. The resale right is a royalty set by statute, and it cannot be waived or assigned.

The Export Control Act 2002 is the parent Act. The Secretary of State must issue guidance on the general principles for using the licensing powers given by a control order (s. 9). The Secretary of State must also report to Parliament each year on how the control works (s. 10).

The control order is the Export of Objects of Cultural Interest (Control) Order 2003, S.I. 2003/2759. It bans export except under a written licence granted by the Secretary of State, and in line with all the conditions attached to that licence (art. 2). It covers any object of cultural interest made or produced more than 50 years before the date of export (Sch. 1).

Four things are exempt. Postage stamps and other items of philatelic interest. Birth, marriage or death certificates and other documents about the personal affairs of the exporter or the exporter’s spouse. Letters or other writings by or to the exporter or the exporter’s spouse. And goods exported by, and personally owned by, their maker or producer, or that person’s spouse, widow or widower.

The Schedule contains no money figure. Age is the only test in the Order. Every value limit the trade works to sits one level down, in the licences granted under article 2.

The statutory guidance from the Department for Culture, Media and Sport, issued in March 2015, sets out the system. To lighten the load on exporters, the Secretary of State has issued open licences. They allow certain specified objects to leave without an individual licence. There are three: the Open General Export Licence (Objects of Cultural Interest), the Open Individual Export Licence and the Specific Open Licence.

Any exporter may use the Open General Export Licence. It may allow the permanent export of objects valued below set financial thresholds. An object above certain age and value limits that no open licence covers needs an individual export licence from the Secretary of State.

The same thresholds decide who examines the object. Normally, an object goes to an Expert Adviser only if two things are true. It is valued at or above the financial threshold in the Open General Export Licence. And it has been in the United Kingdom for more than 50 years. The Expert Adviser then considers whether it is a national treasure.

The figures are in the current Open General Export Licence, which Arts Council England publishes.

For a collection, the shape of the rule matters most. Below the limit for its category, an object leaves on the open licence and nobody examines it. At or above the limit, and in the country for more than fifty years, it goes to an Expert Adviser. That is where the risk sits. The first questions are the object’s category and two dates. The price comes after.

If the Expert Adviser objects, the case goes to the Reviewing Committee on the Export of Works of Art and Objects of Cultural Interest. The test is whether the object’s departure from the United Kingdom would be a misfortune. The guidance asks three questions.

The point most often got wrong is simple. An object needs to meet only one criterion to count as a national treasure. It can meet more than one, and no criterion ranks above the others. The criteria are named after the committee chaired by Viscount Waverley, appointed in 1950 to advise on export policy.

If a criterion is met, the Committee recommends deferring the licence decision for a set period, normally four to nine months in total. This gives time for an offer to buy the object to be made to the owner. The Committee also recommends the fair market price for that offer, and the Secretary of State decides the price.

Owners tend to underestimate what happens if they refuse that offer. An owner is entirely free to reject it. But if an owner refuses an offer from a public source, the Secretary of State will normally refuse the licence. If no offer is made during the deferral period, a licence will normally be granted. If the owner says in advance that they would accept no offer, the Secretary of State will also normally refuse.

The guidance also lists what the Expert Adviser must not take into account. Read it before preparing an argument. The adviser must ignore their own institution wanting the object, and the knowledge that any public institution wants it. They must also ignore an owner’s promise to give or bequeath it to a British institution later. Where the object is going, the conditions there and press speculation are excluded too.

The Artist’s Resale Right Regulations 2006, S.I. 2006/346, give artists a resale royalty. The author of a work still in copyright is entitled to a royalty on any resale after the author’s first transfer of ownership (reg. 3).

Three provisions do most of the work, and each blocks a route people often try. The right cannot be assigned, and any charge over it is void (reg. 7(1) and 7(2)). A waiver has no effect, and an agreement to share or repay royalties is void (reg. 8(1) and 8(2)). The right can be exercised only through a collecting society (reg. 14).

So a clause in a sale agreement where the artist gives up the royalty, or agrees to hand it back to the seller, has no effect. The agreement to repay is void.

The seller and the “relevant person” are jointly and severally liable for the royalty: either can be made to pay all of it (reg. 13). The relevant person is the seller’s agent. If there is no seller’s agent, it is the buyer’s agent. If there is neither, it is the buyer.

The right lasts as long as the copyright in the work (reg. 3). Copyright expires 70 years after the end of the calendar year in which the author dies (s. 12(2), Copyright, Designs and Patents Act 1988). So the royalty outlives the artist by seventy calendar years and passes with the estate.

The royalty is charged in slices. Each portion of the sale price has its own rate, and the results are added together (Sch. 1).

Two thresholds decide whether the scale applies at all. The sale price must be at least £1,000 (reg. 12(3)(b)). The right also does not apply where two things are both true. The seller bought the work directly from the author less than three years before the sale. And the sale price does not exceed £10,000 (reg. 12(4)). That rule lets a gallery resell a young artist’s work without the royalty.

The currency is the recent change, and the one most often got wrong: every account written before 2024 gives these figures in euro. The Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023, S.I. 2023/1285, made on 28 November 2023, replaced the euro figures with sterling. £1,000 replaced 1000 euro in regulation 12(3)(b). £10,000 replaced 10,000 euro in regulation 12(4)(b). Schedule 1 got sterling bands, and the cap became £12,500 in place of 12,500 euro.

Regulations 3 and 4 of that instrument came into force on 1 April 2024. Under regulation 4, the changes do not apply where the sale contract was dated before that day. A resale contracted on 31 March 2024 is still calculated in euro. For an estate checking royalty statements across that date, the contract date decides the currency, whatever the settlement date.

A licence means the object may leave. A paid royalty means the artist has been paid. Each settles only its own question. Owners deal with both together because they come up at the same moment, when a work is sold to a buyer abroad. The same people at the same house handle both.

In the collections ArtisDomus assesses, the field that settles the export question is usually missing from the inventory. An object made more than fifty years before export falls under the Order. It goes to an Expert Adviser when it also meets two tests. Its value is at or above the licence limit for its category. And it has been in the United Kingdom for more than fifty years. Those are two different dates, and most records hold neither.

A summary of the law. It is not legal or tax advice.