Key facts
- The UK Treasury is considering a temporary exemption from the 0.5% stamp duty on shares for newly listed companies.
- This proposal aims to make London a more attractive venue for initial public offerings (IPOs).
- The current stamp duty on share transactions is 0.5% for UK-incorporated companies.
- The exemption is intended to reverse the decline in UK IPO activity and retain companies under UK ownership.
- The proposed holiday for IPO shares is expected to last for two to three years post-listing.
The UK Treasury is contemplating a temporary exemption from the 0.5% stamp duty on shares for newly listed companies, a move designed to revitalize London's struggling equity market and encourage more firms to list domestically. This proposal comes as a growing number of companies have opted for listings in New York or Amsterdam, citing high costs and regulatory hurdles in the UK.
The current stamp duty, levied on UK-registered company shares purchased in secondary markets, has been criticized for hindering liquidity and capital formation, particularly for small and medium-sized enterprises. The proposed exemption, which could last for two to three years post-listing, aims to reduce transaction costs for investors and make London more competitive globally. This initiative follows efforts by Chancellor Rachel Reeves to address the decline in UK IPO activity, with the goal of increasing IPO volumes significantly by 2027.
Sources indicate that the Treasury is drafting this policy, with a consultation period expected to run until January 2026. The measure is anticipated to be part of the Spring Budget in 2026. The aim is to attract both domestic and international IPOs back to the London Stock Exchange and its Alternative Investment Market (AIM), thereby reasserting London's position as a leading global financial center.
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