UK should scrap stamp duty on shares, says Jupiter Asset Management

The government should scrap stamp duty on share sales to boost the economy, according to a leading UK investment firm.

Matt Beesley, chief executive of Jupiter Asset Management, said there was an “urgent need” for ministers to encourage investment in the stock market.

Ending this tax would boost the city in the years to come and represents “a forward-thinking move that we, like many other investors, would applaud,” he added.

Investors pay a 0.5 per cent stamp duty on shares they buy that are listed in the UK, but this tax does not apply to shares bought in overseas companies.

This means that a saver who buys £10,000 worth of shares in a FTSE 100 company such as Rolls-Royce pays £50 in tax, but would pay nothing if they made the same investment in New York-listed Nvidia.

A number of City investment firms, including Abrdn, AJ Bell, Hargreaves Lansdown and Interactive Investor, have criticised the tax.

The clamour for stamp duty comes amid growing fears that low valuations have left London-listed stocks vulnerable to predators looking to buy up companies on the cheap.

The London Stock Exchange has also seen an exodus of large companies moving to New York.

Beesley said: “The long-term benefits of removing this tax would likely far outweigh the costs, as stamp duty on stock market transactions accounts for less than half of one per cent of all UK tax revenues.”

Buying stocks “leads to growth, which creates jobs, which creates wealth,” he added.

A Treasury spokesman said: “There is no time to waste in fixing the fundamentals of the economy, which is why we have taken immediate action to boost investment and economic growth.”