Budget 2025 Rachel Reeves Proposes Stamp Duty Holiday Boost for Investors

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Budget 2025 Rachel Reeves Proposes Stamp Duty Holiday Boost for Investors

Chancellor Rachel Reeves is expected to introduce a significant stamp duty holiday aimed at revitalizing the UK stock market during the upcoming budget announcement. This initiative, set to be presented on Wednesday, proposes a three-year exemption from the 0.5% stamp duty for shares in newly listed UK companies following their initial public offering (IPO).

Objective of the Stamp Duty Holiday

The proposed stamp duty holiday seeks to enhance the attractiveness of the London market, which has faced increasing competition from international markets. Concerns have been raised about the growing number of UK companies choosing to list abroad rather than in London.

Recent Trends in Company Listings

Flutter Entertainment, owner of Paddy Power, has moved its primary listing to New York.
Several British firms have been acquired by foreign corporations, indicating a trend away from domestic listings.

Emma Wall, chief investment strategist at Hargreaves Lansdown, believes that this stamp duty initiative will provide a “welcome boost” to London’s IPO market. She emphasizes that London has been losing ground to New York, where companies prefer the regulatory environment and funding options available on the New York Stock Exchange.

Potential Benefits for Investors

If implemented, this three-year stamp duty holiday could enhance the appeal of investing in British firms. It aims to address the concerns of domestic businesses regarding the demand for UK shares.

Impact on Government Policy

Wall suggests that this move would reinforce the government’s commitment to being pro-business and supporting the growth of a retail investment culture in the UK. The proposal aligns with broader economic strategies aimed at improving the competitiveness of the City of London as an IPO hub.

Additional Budget Measures

In addition to the stamp duty holiday, reports indicate that the chancellor may introduce a new “mansion tax” targeting high-value properties. Furthermore, there are concerns about a potential reduction of the cash ISA limit from £20,000 to £12,000, which could impact savers across the country.

The Treasury has been approached for comments regarding these upcoming proposals, indicating ongoing discussions about their potential economic effects.