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Chancellor Rachel Reeves is reportedly poised to announce a three-year stamp duty holiday for new UK stock market listings in Wednesday’s Budget.
The proposed scheme would exempt investors from the current 0.5 per cent stamp duty on shares in newly listed UK companies for three years following their initial public offering (IPO), providing a significant incentive for new domestic listings.
The initiative seeks to buoy the London market’s competitiveness, addressing concerns that it is losing ground to overseas rivals.
A raft of firms have defected abroad in recent years, including gambling giant Flutter Entertainment, the owner of Paddy Power, which has switched its main listing to New York.
Other British companies have also been acquired by foreign competitors.
Emma Wall, the 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.
Rachel Reeves is looking to buoy the City’s competitiveness for IPOs (PA Archive)
“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.
On Monday, it also emerged that the chancellor is set to hit thousands of Britain’s most expensive properties with a new “mansion tax” levy.
She is also accused of planning to launch a tax raid on savers, with the chancellor set to cut the cash ISA limit from £20,000 to £12,000.
