"Investors currently pay stamp duty when purchasing UK-listed shares, a system that many in the City argue discourages investment at a time when London is trying to regain ground lost to New York, Frankfurt and Asian markets. The US, China and Germany impose no such tax, while Ireland's 1% levy is the only higher rate in a major developed market. London's Alternative Investment Market (AIM) is already exempt."
"City figures have long called for the complete abolition of stamp duty on shares, suggesting the boost to market activity could ultimately increase tax revenues. But with stamp duty raising £3.3 billion in 2023, or around 0.3% of total tax take, a full removal may be difficult to justify against a tight fiscal backdrop. Reeves has already acknowledged that Labour's manifesto pledge not to raise taxes is under strain due to global conflicts, higher borrowing costs and new US tariffs."
Officials are considering a two- or three-year exemption from the 0.5% stamp duty on UK share transactions for newly listed companies to encourage listings in London. The proposal aims to revive London’s competitiveness against New York, Frankfurt and Asian markets by reducing investor costs. The US, China and Germany impose no equivalent tax, while Ireland charges 1%, and AIM listings are already exempt. Complete abolition has been urged by City figures but stamp duty raised £3.3 billion in 2023, making full removal difficult amid fiscal constraints. Targeted relief for IPOs could attract high-profile listings but may be politically sensitive.
Read at Business Matters
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