Chancellor Rachel Reeves is reportedly planning to announce a three-year stamp duty holiday on new UK stock market listings in Wednesday’s Budget as the Government looks to boost the flagging London market.
It is thought the plans will see investors exempted from paying the tax – currently at a rate of 0.5% – on shares in companies that are newly-listed in the UK for the first three years following its initial public offering (IPO).
The Government is said to be looking to help buoy the London market’s competitiveness amid fears it is losing out to overseas rivals, with a raft of firms having defected abroad in recent years.
Gambling firm and Paddy Power owner Flutter is among firms that have switched their main listing to New York, while a number have also been bought out by overseas rivals.
Emma Wall, chief investment strategist at Hargreaves Lansdown, said the stamp duty move would be a “welcome boost” for London’s IPO market and demand for UK shares.
She said: “London has been losing out to New York in recent years, as businesses favour the funding and regulatory environment of the 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.”
She said a three-year stamp duty holiday “would make buying British more enticing for investors and help redress some businesses’ concerns about demand for UK shares”.
“If this goes ahead, it would help strengthen the Government’s stated position that they are both pro-business and supportive of a growing retail investment culture in the UK,” she added.
The Treasury has been approached for comment.
