UK Chancellor Explores Stamp Duty Exemption for New Listings to Boost London's IPO Hub Status
Chancellor Rachel Reeves is exploring a stamp duty exemption for newly listed companies in the UK, aiming to boost London's competitiveness as a global IPO hub. The move could offer a two- or three-year holiday on the 0.5% stamp duty levied on UK share transactions.
Several companies have shown interest in listing on the London Stock Exchange (LSE) this month. Beauty Tech, Princes, and Fermi America have announced their plans, with Shawbrook expected to follow suit. The exemption could stimulate demand, attract global capital, and support valuations for these newly listed companies.
The UK's autumn budget, due later this year, may include this targeted relief. The Treasury is considering the exemption as a way to compete with other major markets like the US, China, and Germany, which impose no stamp duty on share transactions. Ireland's 1% levy is the only higher rate in a major developed market.
While some city figures advocate for the complete abolition of stamp duty on shares to boost market activity and potentially increase tax revenues, the Treasury must balance this against a tight fiscal backdrop. Stamp duty raised £3.3 billion in 2023, around 0.3% of the total tax take. The negotiations are ongoing and a decision is expected by the end of 2023 or early 2024.
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