Chancellor Rachel Reeves is preparing a significant tax break for the City of London, with plans to unveil a three-year stamp duty holiday on shares of newly-listed companies in Wednesday's Budget.
A Boost for London's Competitiveness
The proposed measure is a direct response to concerns that the London market is losing its appeal to overseas rivals like New York. Investors would be exempt from paying the 0.5% stamp duty on shares of companies undertaking their Initial Public Offering (IPO) in the UK for the first three years after listing.
This move is designed to make London a more attractive destination for companies considering going public. In recent years, a number of prominent firms, including gambling giant and Paddy Power owner Flutter, have shifted their primary listings to the United States, dealing a blow to the UK's financial prestige.
Expert Reaction and Market Impact
Financial experts have welcomed the potential announcement. Emma Wall, chief investment strategist at Hargreaves Lansdown, described the rumoured stamp duty holiday as a "welcome boost" for both the London IPO market and demand for UK shares.
She stated, "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. But if this Budget rumour proves accurate, it may be the carrot British businesses need to plump for a domestic listing."
Wall further explained that a three-year holiday "would make buying British more enticing for investors and help redress some businesses’ concerns about demand for UK shares." She added that the policy would strengthen the Government's pro-business stance and support for a growing retail investment culture in the UK.
The Treasury has been approached for comment on the reports ahead of the official Budget announcement.
