What Investors Can Expect From The New UK Labour Government

With the recent election victory of Keir Starmer’s Labour Party, marking the first Labour government in 14 years, significant changes are on the horizon for the UK. This new administration brings a fresh perspective and policy direction, influencing various sectors, including finance, housing and taxation.

Westbrooke Associates understands the importance of staying ahead of political shifts and what they mean for your investments. Here’s an in-depth look at what investors can expect and how Westbrooke Associates can guide you through these changes.

Labour has pledged to increase the annual rate of new homes built to 300,000, a significant rise from last year’s 231,100. This ambitious goal aims to reverse decades of decline in public sector housebuilding. Moreover, it promises the largest increase in social and affordable housing in a generation.

For investors, this means potential opportunities in the housebuilding sector, particularly for companies focused on affordable housing. We specialise in identifying such opportunities, ensuring you can invest in sectors poised for growth under the new government’s policies.

Labour has promised not to raise income tax, national insurance, or VAT rates. However, the need to increase the tax take has led to speculation about other potential targets. This could include changes to capital gains tax (CGT) and increased taxation on private schools and oil and gas companies.

For investors, understanding these potential changes is crucial. We offer tax-efficient investment opportunities, such as the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). These schemes provide substantial tax reliefs, making them attractive options for mitigating tax impacts while supporting high-growth potential companies.

Labour has emphasised its commitment to low base rates, which is critical given the current average mortgage rates. Labour’s substantial majority could lead to increased investment and higher GDP, positively impacting the UK’s economic growth.

We continuously monitor economic trends and interest rate changes to provide timely investment opportunities, helping you to capitalise on growth opportunities while managing risks associated with interest rate fluctuations.

Labour’s approach includes tougher regulations and greater collaboration with private sector investment. Specialising in these areas, we offer curated investment opportunities that align with your financial goals and the evolving regulatory landscape.

Labour plans significant reforms in employment laws, aiming to provide greater rights and protections for workers. This includes day-one employment rights, banning zero-hours contracts and introducing a new single “worker” status.

These changes could impact various sectors, influencing business operations and profitability. Westbrooke Associates will continue to assess insights into how these reforms might affect your investments and help you adapt your portfolio to mitigate potential risks.

While Labour has ruled out re-joining the Single Market or EU Customs Union, it aims to enhance cooperation in areas such as professional qualification recognition and climate policies. This balanced approach could offer stability and new opportunities in international trade.

Westbrooke Associates leverages extensive experience to help you navigate the complexities of trade policies, ensuring your portfolio remains robust and diversified.

Westbrooke Associates is your gateway to affordable, accessible and rewarding private equity opportunities. We showcase diverse projects designed to maximise your investment potential through careful planning and strategic execution. Our expertise spans various sectors, including sustainability, finance, infrastructure and lifestyle markets, providing you with the tools to capture attractive returns.

We streamline the investment process, offering comprehensive information to make informed decisions. As the official agent for the companies we represent, we facilitate direct communication with management teams, ensuring transparency and confidence. And the best part? Whether you’re saving for retirement or seeking to grow your wealth, investing in tax-efficient options like EIS and SEIS allows you to significantly lower your tax burden and enhance your overall financial returns.

The EIS (Enterprise Investment Scheme) targets medium-sized startups trading for less than seven years, with fewer than 250 employees and gross assets under £15 million. Investors can contribute up to £1 million per tax year and receive a remarkable 30% tax break.

On the other hand, SEIS (Seed Enterprise Investment Scheme) is tailored to early-stage companies employing fewer than 25 individuals, with less than three years of trading experience and gross assets under £350,000. Investors can contribute up to £200,000 per tax year and receive an extraordinary 50% tax break.

Additionally, any profits from share sales after three years are exempt from Capital Gains Tax. Utilising SEIS offers a more substantial tax incentive for eligible investors and both SEIS and EIS can be used together.

Under both SEIS and EIS, any profit arising from the sale of shares after three years is entirely exempt from Capital Gains Tax (CGT), which is the tax levied on the gain made from selling or disposing of an asset that has increased in value. Welcome news indeed, considering the UK’s Capital Gains Tax allowance was reduced by 50% on 6th April 2023.

Similarly, holding shares for a minimum of two years under both SEIS and EIS also exempts investors from inheritance tax. Furthermore, in the event of selling SEIS/EIS shares at a loss, investors have the potential to offset the loss against their Capital Gains Tax by utilising loss relief.

As Labour now moves from general ideas to hard detail, the real decision-making begins and the implications for business and investors will come into focus.

The first substantive indication of priorities will be the King’s Speech on 17th July, which sets out the government’s legislative agenda.

In the meantime, you can explore our range of tax-efficient investment options and discover how we can help you achieve your financial goals in this evolving political landscape. Contact us today to learn more and start your investment journey with confidence.