You have heard the stories: an artist sells a digital picture, and then every time it changes hands afterwards, they automatically get a cut — forever. That is the promise of NFT royalties, and it is one of the most genuinely innovative ideas to come out of the crypto world. It is also one of the most misunderstood. What are NFT royalties, how do they actually work, and — crucially — do they still work in 2026? This plain-English guide explains everything a curious UK reader needs to know, no technical background required.
The Simple Version: A Tip Jar That Follows the Artwork
Imagine you paint a picture and sell it at a car boot sale for £50. Years later it sells at auction for £50,000. In the traditional art world, you see none of that — the resale profit goes entirely to the middlemen. NFT royalties were designed to fix exactly that injustice.
An NFT (non-fungible token) is a unique digital certificate of ownership, recorded on a blockchain, that can represent artwork, music, videos or collectibles. A royalty is a percentage — typically 5% to 10% — that the original creator sets at the moment of creation. The idea: every time the NFT is resold on a marketplace, that percentage is automatically sent to the creator’s wallet. Sell once, earn forever — at least in theory.
How Royalties Technically Work (Without the Jargon)
When a creator “mints” an NFT (publishes it on the blockchain), they can include a royalty instruction: “pay 7.5% of every resale to this wallet address.” Marketplaces — the eBay-like websites where NFTs trade — read that instruction and are supposed to enforce it, deducting the royalty from the seller’s proceeds and routing it to the creator automatically. No invoices, no lawyers, no chasing payments. The blockchain handles it.
Here is the catch that surprises most people: royalties are not enforced by the blockchain itself. They are enforced by the marketplace where the sale happens. The token says “the creator would like 7.5%,” but it is the marketplace’s software that decides whether to honour it. This single technical detail explains nearly all the drama around NFT royalties in recent years.
The Royalty Wars: What Happened
For a while, major marketplaces honoured creator royalties as standard, and artists earned significant ongoing income. Then competition heated up. New marketplaces began offering zero-royalty trading to attract buyers and sellers with lower fees — and trading volume followed the discounts. Established platforms faced a choice: keep enforcing royalties and lose business, or drop them and keep volume.
The result was messy. Some platforms made royalties optional (“tip the creator if you like”), others enforced them only for certain collections, and the industry split into competing standards. By 2026, the landscape has partially stabilised: several major marketplaces now enforce royalties by default while competing on other features, and new technical standards aim to make royalties enforceable at the token level rather than relying on marketplace goodwill. But the era when royalties were automatic everywhere is over — creators now need to check each marketplace’s policy.
What This Means for Creators in the UK
Royalties are a bonus, not a business plan
If you are a UK artist, musician or photographer considering NFTs, treat royalties as potential upside rather than reliable income. Price your initial sale as though no royalties will ever arrive; anything that does is a welcome extra.
Choose your marketplace deliberately
Before minting, check the marketplace’s current royalty policy — and whether it applies to all collections or only those using specific technical standards. Policies change, so verify close to launch, not months ahead.
Understand the tax position
HMRC treats cryptoassets, including NFTs, under existing tax rules — royalty income from NFT resales will generally be taxable, whether as trading income or miscellaneous income depending on your circumstances. HMRC’s cryptoassets guidance is the starting point, and keeping records of every royalty payment from day one will save headaches later.
Protect the underlying rights
A critical misunderstanding: buying an NFT does not normally buy the copyright in the artwork — it buys the token. Creators should be explicit in writing about what rights transfer, if any. The questions around digital ownership echo the debates about whether AI art is real art and who owns the copyright — in both cases, the technology is new but the underlying intellectual property principles still apply. If your creative work has commercial value, understanding how to protect your ideas and intellectual property in the UK matters far more than the token standard you choose.
What This Means for Buyers and Collectors
If you buy NFTs, royalties are simply part of the price mechanics — a slice of each resale goes back to the creator. It is worth knowing that royalty percentages vary by collection (check before you buy, as a 10% royalty meaningfully affects resale maths), and that selling on a marketplace with different royalty enforcement can create surprises. None of this makes NFTs good or bad investments — the FCA’s warning that cryptoassets are high-risk and largely unregulated applies fully to NFTs, most of which lose value.
Royalties Beyond Art: Music, Tickets and Gaming
The royalty concept extends well beyond digital pictures. Musicians have experimented with NFTs that pay them on every resale of limited-edition tracks — a direct answer to streaming economics that pay fractions of a penny. Event organisers have explored NFT tickets with resale royalties that let them share in secondary-market markups while capping tout prices. Game developers use them for in-game items traded between players. In each case the pattern is the same: the technology works beautifully when platforms cooperate, and frays when they do not.
Conclusion
NFT royalties are a brilliant idea with an asterisk: a self-executing tip jar for creators that only works when marketplaces agree to enforce it. For UK creators, the sensible approach is to understand the mechanics, choose platforms with clear royalty policies, keep immaculate tax records, and protect the underlying intellectual property rights that actually carry the value. Treat royalties as a welcome bonus rather than a pension plan, and you will never be disappointed — and on the occasions the payments do arrive automatically, years after the original sale, you will appreciate the quiet genius of the idea all over again.
Frequently Asked Questions
Do NFT creators still get royalties in 2026?
Sometimes. It depends entirely on the marketplace where the resale happens — some enforce creator royalties by default, others make them optional or ignore them. Creators should check each platform’s current policy before minting.
What is a typical NFT royalty percentage?
Most creators set between 5% and 10% of the resale price. Higher percentages can deter resales, so there is a balance between ongoing income and keeping the work tradable.
Do I pay UK tax on NFT royalty income?
Generally yes — HMRC treats cryptoasset income under existing tax legislation, and royalty payments received in crypto are taxable. Keep records of amounts and dates, and consult HMRC’s cryptoassets guidance or an accountant.
Does buying an NFT give me the copyright?
Usually not. An NFT is a token proving ownership of the token itself; copyright in the underlying artwork stays with the creator unless explicitly transferred in writing. Always check the terms.
Are NFTs a good investment?
The FCA considers cryptoassets — including NFTs — high-risk, speculative and largely unregulated, and most NFTs lose value. Buy because you value the work or the utility, never with money you cannot afford to lose.
