The stamp duty reserve tax imposes a 0.5% levy on share purchases in the UK, creating a competitive disadvantage against countries that do not have such a tax.
Dan Neidle pointed out that the stamp duty ultimately burdens end-investors and raises the cost of equity for companies, leading to bias towards debt financing.
Abolishing stamp duty could potentially lead to increased market activity and higher overall Treasury receipts, suggesting a pro-growth strategy could be beneficial.
Countries like the US, China, and Germany do not impose any equivalent tax, raising concerns about the UK’s attractiveness for stock market listings and liquidity.
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