UK Art Resale Right Blunder – artmarketblog.com

By On December 24, 2008 · 6 Comments

UK Art Resale Right Blunder – artmarketblog.com

A press release from the UK Intellectual Property Office was posted on the 19th of December which informs people that the UK Government intends to extend the length of time that the resale right applies only to living artists and not to deceased artists. A letter was sent to the European Commission by John Denham, Secretary of State for Innovation, Universities and Skills, which outlines the reasons that the UK Government believes that extending the date that the resale right will become applicable to the work of deceased artists from 2010 to 2012 is the best option.

The most obvious argument that the Government has put forward is, as one would expect, that the introduction of the resale right for works sold by deceased artists would increase the financial burden on the UK art market. According to Denham’s letter, the current economic crisis would amplify the effects that increasing the number of works for which a resale royalty is applicable would have on the number of works being purchased. What Denham seems to have overlooked, however, is that by not introducing the resale right for deceased artists the UK Government is in fact promoting a situation where works by deceased artists are more appealing to dealers than works by living artists. Considering that the work of contemporary artists is more likely to suffer during a financial crisis, the added burden of having to compete with the works of deceased artists which to not attract a resale royalty is likely to become a much more significant factor.

The press release from the UK Intellectual Property Office quotes Denham as saying that “If the art traders are seeing a reduction in business they will not only sell fewer works- but will not buy them from artists either. This will have a knock on effect for artists who will find that there is less of a market for their work”. What this quote proves is that Denham really doesn’t understand the art market and is not cognisant of the implications that continuing to promote an unlevel playing field could have on the work of living artists. If Denham doesn’t realise that not introducing the resale right for deceased artists is likely to encourage dealers to favour works by deceased artists over living artists then he needs to do a bit more analysis of the situation.

A solution to all the problems outlined by the UK Government would be a compulsory world-wide resale right for both living and deceased artists. This would mean that the UK art market would not be seen as less attractive than the art markets of other countries that do not have the resale right as the UK government fears it will. It would also mean a level playing field for both living and deceased artists. The likelihood of a compulsory world-wide resale right being introduced in the near future is unfortunately very low.

You can view the press release from the UK IPO here:
http://www.ipo.gov.uk/about/press/press-release/press-release-2008/press-release-20081219.htm

and the letter from John Denham here:
http://www.ipo.gov.uk/press-release-20081219-letter.pdf

UK Art Resale Right Blunder artmarketblog.com**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.comt UK Art Resale Right Blunder artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

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  • http://elizabethbelhadj.blogspot.com ElizabethBelhadj

    D’roit de Suite – or the Artists Resale Rights

    If I am correct, in the EU we have currently 11 state members holding the ARR, of this number we are seeing only 8 active members pushing forward our artistic rights. If we are to see a world wide reaction of such a movement, then all 11 memeber states should participate in the inactment of the ARR. By the 11 states acting together in pushing forth the ARR, it would encourage a world wide participation in our favour.

    The UK Government are under- estamating the impact that the ARR could have on the current art market.

    Seeing a world wide movement of this act, would see the art market florish across the board, both for living and dead artist. Making and encouraging a growth in production and sales of original art pieces.

    So why does the EU hold back from pushing the AAR forward ?

    In the slow down of growth regarding the commercial market, it is understandable that with any new venture, there are reservations, but to turn the current situation around investors have to start looking up instead of down, opening new doors of encouragement for our world wide- Art Market, could only lead to new oppotunities and at the same time, letting go of restricting the bounties for all creative persons. So moving forward seems the best direction.

  • http://blogsovetov.ru/ Рецепты

    thanks for your information. very helpfull. i will bookmark it.

  • Matt

    I don’t agree with your analysis. The secondary and primary markets are substantively different. Resale right doesn’t apply anyway on a first sale of a work by a contemporary artist in a gallery – it is a ‘resale’ right. The effect on contemporary artists will be negligible. The effect on art dealers,. many of whom support shows of contemporary artists by their dealing on the secondary market, would have been considerable. Auction trade especially, but also dealer trade, would have gone to countries outside the resale right area. Already as it is UK dealers are stockpiling works in Switzerland in order to avoid having to charge the resale right when they sell (if the work is physically in Switzerland at time of sale, the sale takes place in Switzerland, ergo no resale right tax to pay to HM Gov). Let’s hope that the derogation is the first step towards discarding the whole idea of a resale right. Britain’s art-market is one of the country’s success stories: why destroy it in aid of EU ideology and because of lobbying by private bodies such as DACS?

    • http://www.artmarketblog.com artforprofits

      Hi Matt,
      Thanks for the comment. I understand where you are coming from but I disagree that the effect on contemporary artists will be negligible. While the art market boom was in full swing the resale royalty would not have been of great concern to those buyers driving the art market. Now that the art market is in correction mode and the financial crisis has taken hold every penny counts and those mega wealthy trophy hunters are now being replaced by sensible collectors and investors who do not have copious amounts of money to waste. Although there may be some dealers who choose to conduct transactions outside the UK because of the Resale Royalty it will only be a small percentage and only for very valuable works where the cost of conducting the transaction overseas can be justified. If there was going to be a mass exodus of dealers to countries where there is no RRR it would have already happened when the RRR was introduced for the resale of works by living artists. Putting money back into the visual arts is really important especially for contemporary artists but if works by living artists are going to attract the royalty then the works of deceased artists need to as well otherwise the advantage of the RRR to the living artists is decreased by the advantage given to deceased artists by not making the RRR applicable for their work.

      Nick

  • http://elizabethbelhadj.blogspot.com ElizabethBelhadj

    It is very clear that with out the implementation of the ARR worldwide, living artists are at a considerable loss which leads on to unfair advantages compared to deceased artists.

    Deceased Artists already have a unfair advantage, anyway, with their works being more desirable to collectors on the bases of rarity.

    So I think the debate is not where the collectors can obtain cheaper or low cost art, its more along the lines of creating oppotunites for the art market to flourish for both the living and deceased, on an equal level.

  • http://bidjes.com Amanda Bidjes

    The art of the deceased will always be more appealing for the collectors.
    Having a think about it, it is all they like to day. Being an artist isn’t simple if you are only recognized later.

    I sincerely hope artists will start to get appreciated for their work when they release their art.

    Amanda

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