How will Labour affect the Art Market?

Labour's recent victory, led by Keir Starmer, could reshape the U.K. art market. Key changes may include a rise in Capital Gains Tax, urging collectors to sell now, and softer Brexit restrictions, lowering shipping costs and VAT on imported art. Labour's proposed funding reforms and Arts Council review aim to boost Britain's position in the global art market, attracting international investors and collectors.

With the Labour Party's landslide victory and its focus on closing a substantial gap in public finances, there is a strong possibility that Capital Gains Tax could increase under the new government. This presents an opportune moment to sell your art collection, as doing so now might allow you to avoid potential higher taxes in the near future. Taking advantage of the current tax rates could maximise your financial return before any changes are implemented, safeguarding your investment against the anticipated policy shifts.

Looking a little more towards the future, the new Labour government might help revitalise the British art market by addressing the legislative and bureaucratic challenges that have arisen since Brexit.

With a strong mandate in Parliament, the government is well-positioned to implement changes that could alleviate logistical and financial burdens. This would include reducing shipping costs and streamlining paperwork such as that required for Temporary Admission.

Additionally, ongoing discussions with the British Art Market Federation suggest that measures like waiving value-added tax (VAT) on some imported artworks could be pursued, potentially boosting the U.K.'s standing in the global art market.

Labour's plans to reform funding models could provide a much-needed boost to the art market. By collaborating with funding bodies, investors, and donors, Labour intends to attract diverse financial resources for arts organisations.

Additionally, Labour has pledged to review the Arts Council England, which could lead to more efficient distribution of existing funds and potentially unlock new opportunities for artists and institutions across the country.

Moreover, the government's focus on easing financial barriers demonstrates a commitment to enhancing the U.K.'s competitiveness in the global art market. By addressing tax and economic policies that may deter international collectors and investors, Labour aims to create a more favorable business environment. These efforts, combined with a positive and inclusive vision for the cultural sector, are designed to attract international art trade and investment, ultimately reinforcing Britain's status as a leading cultural and economic force in the global art market.