- Investors will receive a three year stamp duty break on newly-listed companies’ shares from tomorrow
- The reforms are designed to encourage companies to list in the UK
- Scrapping stamp duty on UK shares in an ISA would go further in boosting the stock market
Laura Suter, director of personal finance at AJ Bell, comments:
“The change to stamp duty is a small move, but a welcome one for investors buying newly-listed companies from tomorrow. The change will mean that for three years from listing anyone buying that company won’t have to pay the 0.5% tax on buying shares. For someone investing £10,000 that equates to a £50 saving – hardly going to shift the dial significantly, but a welcome boost nonetheless.
“Collectively the move is forecast to save investors £50 million a year by 2028/29 - although the actual cost depends on whether it sparks more companies to list in the UK. Reeves will be hoping the tax break makes the UK a more attractive place for companies to list, to stem the flow of businesses who have opted to list abroad rather than on UK soil.
“The government can use this relief as a test case to see how effective it is at boosting investment in UK companies. It has announced plans to slash the Cash ISA allowance for under-65s as part of its plans to create a nation of investors, rather than savers. And this exemption is intended to offer another incentive to get investing.
“Investors already benefit from a stamp duty exemption when they buy shares at IPO, so it won’t affect those buying into a company when it lists. But it may encourage more people to put their money in newly-listed companies.
“On top of today’s announcement, the government said it plans to continue evaluating stamp taxes with a view to boost UK market involvement. Anything that makes the system easier (and potentially cheaper) for investors has to be welcomed. One option is to scrap stamp duty on UK shares bought in ISAs – creating a truly tax-free environment for investing. This reform would cost around £120 million* and could help to nudge more investors into UK stocks.”
* Estimate based on analysis of total stamp duty paid by AJ Bell customers over the 12 months to March 2025, extrapolated across all UK ISA accounts.
