Chancellor Plans Stamp Duty Holiday on Newly Listed Company Shares to Boost Market
Chancellor Rachel Reeves is set to unveil a significant policy during Wednesday’s Budget. The proposal involves implementing a three-year stamp duty holiday on shares of newly listed companies in the UK stock market. This initiative aims to invigorate the London market, which has faced increasing competition from international markets.
Details of the Stamp Duty Holiday
The planned stamp duty holiday will exempt investors from the existing tax rate of 0.5% on newly listed company shares for the first three years post-initial public offering (IPO). This move is part of the Government’s strategy to enhance the attractiveness of the London stock market to both local and foreign businesses.
Addressing Market Challenges
The proposal comes amid growing concerns that London’s financial center is losing ground to other global markets, particularly New York. Several firms, including notable companies like Flutter, which owns Paddy Power, have moved their primary listings to the United States. Others have been acquired by foreign competitors, further intensifying the challenge for the UK market.
Expert Opinions on the Proposal
Emma Wall, chief investment strategist at Hargreaves Lansdown, expressed optimism regarding the impact of this stamp duty exemption. She believes it could be a “welcome boost” for London’s IPO market and enhance demand for UK shares. Wall emphasized that the proposal could make domestic listings more appealing.
- London has faced competition from New York in recent years.
- A three-year stamp duty holiday may attract more British businesses to list locally.
- The move reinforces the Government’s commitment to fostering a pro-business environment.
Should this initiative move forward, it would serve to alleviate some concerns regarding the declining demand for UK shares. The Government aims to bolster its reputation as supportive of a growing retail investment culture. As of now, the Treasury has been contacted for further comments regarding this proposed stamp duty holiday.
