Reeves tipped to announce a stamp duty holiday for newly-listed UK shares in boost for the City
Rachel Reeves will reportedly announce a stamp duty holiday for newly-listed shares in a boost for the City.The exemption will mean the 0.5 per cent tax on trades will not be payable on UK stocks for three years from their market debuts, Bloomberg reported.The Chancellor’s decision was last night welcomed in the Square Mile as a step in the right direction, though many argue the levy should be scrapped altogether to revive London’s beleaguered market.The tax is blamed by many for deterring investors from buying UK shares. It does not apply when investors buy popular US stocks – adding to the attraction of piling into Wall Street shares instead of those listed in London. Charles Hall, head of research at broker Peel Hunt, said: ‘It’s a step in the right direction and recognises that stamp duty puts the UK at a competitive disadvantage.‘Obviously, it’s time limited, but it does mean that London is comparable to the US for an IPO [initial public offering].‘It’s also a key issue for fintech companies, many of which are considering an IPO. Longer-term we need to address the reality that stamp duty is detrimental to the UK economy and capital markets.’ Backing Britain: Chancellor Rachel Reeves is reportedly planning to announce a three-year stamp duty holiday on new UK stock market listings Dan Coatsworth, broker AJ Bell’s head of markets, said: ‘A stamp duty holiday for the first three years of a company’s listed life would show the Government and the financial regulator are trying to improve the attractiveness of the UK market.’Emma Wall, chief investment strategist at investment platform Hargreaves Lansdown, said: ‘London has been losing out to New York in recent years, as businesses favour the funding and regulatory environment of the NYSE [New York Stock Exchange]. But if this Budget rumour proves accurate, it may be the carrot British businesses need to plump for a domestic listing.’The announcement comes after a decline in the London market’s fortunes in recent years amid a dearth in flotations and an exodus of some companies to New York. Recent weeks have offered a glimmer of hope with listings for Shawbrook, Beauty Tech and Princes Group.Other IPOs, including that of Norwegian software firm Visma, are reported to be coming next year.However, investors have continued to pull cash from UK-focused equity funds.The stamp duty move comes as Reeves also seeks to boost stock market investing by limiting the amount that can be invested in cash Individual savings accounts (ISAs).However, that move is controversial because it is seen by many as punishing prudent savers.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Reeves tipped to announce a stamp duty holiday for newly-listed UK shares in boost for the City
