Shares tax break to save investors just £50m a year
Rachel Reeves' flagship stamp duty holiday on newly listed shares is set to save investors just £50m a year – less than 1 per cent of the total raised by the tax.In last month's Budget, the Chancellor said investors will not have to pay the 0.5 per cent levy when buying shares in companies during their first three years on the stock market.She said she was 'sending a simple message to the world' that 'Britain will back you' if you plan to build a business in the country.But analysis of Budget documents shows the tax break will be worth £50m a year in 2030-31 – or 0.9 per cent of the £5.3billion the levy is forecast to rake in that year. 'Britain will back you': Rachel Reeves' flagship stamp duty holiday on newly listed shares is set to save investors just £50m a yearThe figures raise fresh concerns over how effective the stamp duty holiday will be in boosting investment in UK companies. Michael Summersgill, chief executive of savings and investment giant AJ Bell, described the tax break as 'a token gesture'.And a City source said: 'It's a drop in the ocean, really. Particularly when businesses are dealing with higher costs and higher taxes on everything else.'The Chancellor has so far resisted calls to scrap stamp duty on share trading altogether – despite warnings it makes UK stocks less attractive to investors. And she also used last month's Budget to hit investors with an unexpected increase in taxes on dividends.Industry experts have long called for stamp duty on share trading to be scrapped altogether – though they concede any Chancellor would be reluctant to give up a revenue stream that will bring in a total of nearly £30billion by 2031.Savers who buy £10,000 of shares in FTSE 100 giants such as Rolls-Royce or Marks & Spencer, for instance, pay £50 in tax – but nothing at all to make the same investment in New York-listed Amazon or Microsoft.'It's a frictional tax,' said Summersgill. 'Removing it would be good for the UK capital markets. The benefits that would follow from removing stamp duty would deliver significant help.And Charles Hall, head of research at Peel Hunt, said the stamp duty holiday was 'an important step in the right direction' but added that scrapping the levy altogether was 'essential'.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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Shares tax break to save investors just £50m a year
