End stamp duty on shares to save city, chancellor said

Britain must scrap stamp duty on share trading to revive the ailing stock market, according to the City’s top brokers.

Senior officials have lined up to urge Chancellor Rachel Reeves to abandon the “pernicious tax” amid fears it is deterring investment in the UK, depressing the value of London-listed shares and slowing the economy.

The clamor over stamp duty comes as critics warn that low valuations have left companies on the UK stock market vulnerable to predators looking to buy companies on the cheap.

Several companies have attracted takeover bids, including Royal Mail owner International Distribution Services, insurer Direct Line, cybersecurity firm Darktrace and drinks maker Britvic.

Dan Coatsworth, investment analyst at brokerage AJ Bell, said “a lot of unloved or underrated companies” have been bought up, in a sign that London-listed stocks are “on sale.”

Figures from the London Stock Exchange show that 88 companies worth more than £100 billion will delist or transfer their primary listing from the UK in 2024.

And data from financial markets platform Dealogic revealed by the Mail this week showed that 585 companies with a total value of £779bn have left the London market after being acquired since 2015, while only 567, with a total value of £66 billion, have joined it.

Broker Peel Hunt warned last month of an “acquisition swarm” in 2025. Meanwhile, speculation is mounting over whether FTSE 100 giant Shell will ditch London for New York.

Reeves is under increasing pressure to abolish stamp duty on share trading to boost investment and valuations.

Investors pay 0.5 per cent stamp duty on the price of UK-listed shares they buy, but the tax does not apply to the purchase of shares in foreign companies.

It means that a saver who buys £10,000 worth of shares in FTSE 100 giants such as Rolls-Royce or Marks & Spencer pays £50 in tax, but nothing to make the same investment in New York-listed Disney or Nvidia.

Richard Wilson, head of Interactive Investor, last month described stamp duty as “the elephant in the room” and warned: “We are taxing the UK stock market out of business.”

His comments have been echoed by other senior figures in the city contacted by the Mail.

Julian Morse, joint chief executive of city broker Cavendish, said: “Removing stamp duty on share trading would allow for higher trading volumes and unlock additional tax revenue in the long term.”

Steven Fine, chief executive of investment bank Peel Hunt, said: “At the moment, it is simply cheaper for investors to back companies like Nvidia than Rolls-Royce. For a market with such a rich supply of brilliant companies, the Stamp duty (described as a harmful tax) is putting the UK at a competitive disadvantage.’

Paul Geddes, chief executive of wealth manager Evelyn Partners, said: “There is no single magic formula that can quickly revive interest in the UK market alone, but a combination of reforms can help.”

“A very important one would be the removal of stamp duty on share trading in the UK.”

Simon French, chief economist and head of research at Panmure Liberum, added: “Stamp duty on share trading should be abolished. Countries around the world compete for investment and stamp duty acts as a deterrent. This has a very real negative impact on the economy.

It came as separate figures from fund manager Abrdn, from a report due to be published next week, showed Britons keep just 8 per cent of their wealth in the stock market – the lowest figure in the group of advanced economies. of the G7 – compared to 33 percent. in the United States and an average of 14 percent across the G7.