End stamp obligation on shares to save lots of City, Chancellor informed

Britain must axe stamp duty on share trading to revive the flagging stock market, according to leading City brokers.

Senior figures lined up to urge Chancellor Rachel Reeves to ditch the ‘pernicious tax’ amid fears it is deterring investment in the UK, depressing the value of London-listed stocks and holding back the economy.

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

A number of businesses have attracted takeover offers including Royal Mail owner International Distribution Services, insurer Direct Line, cyber security firm Darktrace and drinks maker Britvic.

Dan Coatsworth, investment analyst at broker AJ Bell, said ‘a bounty of unloved or underappreciated’ companies have been bought in a sign London-listed stocks are ‘on sale’.

Figures from the London Stock Exchange show 88 companies worth more than £100billion either delisted or transferred their primary listing from the UK in 2024.

Fears: Senior figures lined up to urge Chancellor Rachel Reeves to ditch the ‘pernicious tax’

And data from financial markets platform Dealogic revealed by the Mail this week showed 585 companies worth a total £779billion have left the London market after being taken over since 2015, while just 567, worth a total £66billion, have joined it.

Broker Peel Hunt last month warned of a ‘swarm of take-overs’ in 2025. Meanwhile, speculation is mounting about whether FTSE 100 giant Shell will ditch London for New York.

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

Investors pay 0.5 per cent in 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 a saver who buys £10,000 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, boss of Interactive Investor, last month described stamp duty as ‘the elephant in the room’ as he warned: ‘We are taxing the UK stock exchange out of existence.’

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 enable higher trading volumes and unlock additional tax receipts 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 the likes of Nvidia than Rolls-Royce. For a market that has such a rich supply of brilliant businesses, stamp duty – described as a pernicious tax – is putting the UK at a competitive disadvantage.’

Paul Geddes, chief executive of wealth manager Evelyn Partners, said: ‘There isn’t a single magic bullet that is likely to rapidly reignite interest in the UK market by itself, but a combination of reforms can help.

‘A very significant one would be the removal of stamp duty on UK share trading.’

Simon French, chief economist and head of research at Panmure Liberum, added: ‘Stamp duty on share trading should be abolished. Countries around the world are competing 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 hold just 8 per cent of their wealth in the stock market – the lowest in the G7 group of advanced economies – compared with 33 per cent in the US and an average of 14 per cent across the G7.