Abolish stamp duty on shares, says investment giant Interactive Investor
- Richard Wilson wants parties to promise to scrap the ‘absurd’ levy in their manifestos
- Investors pay 0.5% stamp duty on the price of UK-listed shares they buy
- But the levy does not apply to the purchase of shares in foreign companies
One of the country’s largest investment platforms has called for an all-party commitment to abolish stamp duty on share trading to boost the city and wider economy.
Richard Wilson, the chief executive of Interactive Investor, urged the main parties to pledge to scrap the ‘absurd’ levy in their manifestos for the next general election.
Investors pay 0.5 percent stamp duty on the price of UK-listed shares they buy, or £5 for every £1,000 they invest. But the levy does not apply to the purchase of shares in foreign companies.
And it is much higher than the 0.1 to 0.3 percent typically charged in Europe, while in the US there is no tax at all on stock purchases.
So a saver who buys £10,000 worth of shares in FTSE 100 giant AstraZeneca will pay £50 in tax, but nothing for the same investment in New York-listed Amazon.
‘Absurd’: Investors pay 0.5 per cent stamp duty on the price of UK-listed shares they buy, or £5 for every £1,000 they invest
Wilson warned that the tax will deter investment and in turn hurt the economy: “It’s nonsense. It’s a journey to oblivion. It’s absurd.’ He said Chancellor Jeremy Hunt and Minister Bim Afolami are “sympathetic” to the pleas to scrap the tax, which will raise £3.2 billion this year and £23.7 billion between now and 2028-29.
“They are sympathetic, but argue it is an affordability issue,” Wilson said. “My opinion is they can’t afford not to.”
Asked about Labour’s view, he added: ‘God knows.’ But Wilson called on both parties to commit to abolishing the tax in their manifestos, saying: ‘That is absolutely necessary if they are serious about government and innovation in Britain.
‘Liquidity in the markets is like our oxygen. The markets need to breathe. By taxing transactions we choke the air supply and make the markets weak, and the players leave one by one. Give us back our level playing field and let London’s financial markets do what they do best: compete, innovate and win.’
Laith Khalaf, of rival trading platform AJ Bell, said: ‘Stamp duty on shares earns the exchequer around £3 billion to £4 billion a year, so it’s not insignificant, but cutting it could boost the UK stock market and the cost of capital for UK listed companies.’