Rachel Reeves plots stamp duty exemption for newly listed shares
There are growing hopes for a revival for London’s moribund IPO market after reports chancellor Rachel Reeves is preparing to unveil a stamp duty exemption on shares of newly-listed companies.
The move, which is set to be announced at the forthcoming Budget in November, would remove the 0.5 per cent tax charge on the buying of shares for companies which have recently joined the London Stock Exchange.
The exemption is expected to apply for a period of two to three years, the Financial Times reported, adding to an existing exemption from stamp duty for the purchase of shares on the day of IPO.
The stamp duty burden has been cited as a key disincentive for British firms weighing listing in London, as the tax is thought to reduce levels of liquidity by effectively penalising share trading.
Top City voices have called for the total abolition of stamp duty on shares, to reflect their tax treatment in other major IPO venues and rescue the public markets.
Steven Fine, chief executive of Peel Hunt, told CityAM the move would help “shift this doomloop of negativity that seems to pervade the country.”
Fine said: “There are a lot of levers at our disposal that we could pull that either wouldn’t cost the exchequer a bean or could significantly move the dial on the mindset of people you want to commit to growth in the UK.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, told CityAM ditching stamp duty would bring the UK “into line with other jurisdictions and potentially persuade more companies to stay listed in London”.
The proposals come after one of the worst IPO droughts the London market has seen in decades.
Just £184m was raised on the London Stock Exchange in the first nine months of the year, a far cry from the roughly £17bn raised as recently as 2021 and making 2025 the worst year for listings in more than three decades. The amounts raised represent a tiny fraction of the roughly £40bn that has been raised in the US over the same period.
The ranking placed London, once Europe’s premier listing destination, behind Sweden, Spain, Switzerland, Turkey, Poland and Germany and only marginally ahead of Greece and the Netherlands, according to figures compiled by Bloomberg. But the results also reveal a widespread listings drought across the continent, with Sweden the only country that had been able to raise more than £1bn.
“It’s a desert out there,” Neil Wilson, UK investor strategist at Saxo, told CityAM.
“A friend at an investment bank called London a car boot sale with just crumbs of secondary placements and small capital raisings.”