Chancellor Rachel Reeves is reportedly preparing to unveil a significant proposal in the upcoming Budget. She aims to introduce a three-year stamp duty holiday for new stock market listings in the UK.
Key Details of the Proposed Stamp Duty Holiday
The proposed scheme would exempt investors from the existing 0.5% stamp duty on shares of newly listed UK companies. This exemption would apply for three years following their initial public offering (IPO). The initiative is designed to enhance the competitiveness of the London market by attracting new domestic listings.
Reasons Behind the Proposal
Concerns have been mounting that the London market is losing its edge against international rivals. Many firms have chosen to relocate their listings overseas. Notably, Flutter Entertainment, the parent company of Paddy Power, has switched its primary listing to New York.
- Flutter Entertainment relocated to New York.
- Other British firms have also been acquired by foreign competitors.
Potential Impact on the UK Market
Emma Wall, chief investment strategist at Hargreaves Lansdown, expressed optimism about the stamp duty initiative. She believes it would provide a much-needed boost to London’s IPO market and enhance demand for UK shares. Wall stated, “London has been losing out to New York in recent years as businesses favor the funding environment of the New York Stock Exchange.”
If the Chancellor’s proposal materializes, it could encourage more businesses to consider listing domestically. This move would help ease concerns regarding the attractiveness of UK shares to potential investors.
Additional Tax Changes Under Consideration
In addition to the stamp duty holiday, Chancellor Rachel Reeves is also reportedly planning to introduce a new “mansion tax” targeting the country’s most expensive properties. Furthermore, there are allegations regarding a potential reduction of the cash ISA limit from £20,000 to £12,000, which may further affect savers in the UK.
The Treasury has yet to provide an official comment regarding these impending changes.
