Government ‘penalising’ investors with ‘baffling’ stamp duty on shares, says Interactive Investor
Ministers are “penalising” the UK’s investors by levying “baffling” taxes on holding British stocks, one of the UK’s top investment platforms said today.
Interactive Investor, the UK’s second largest platform for retail investors, today slammed the government for maintaining a stamp duty on stocks and said minsters should scrap the charge.
The government is currently consulting on a revamp of the UK’s stamp duty on shares, with plans to roll out a single tax on securities rather than the current set-up of both stamp duty and stamp duty reserve tax.
However, Interactive Investor has called for ministers to go further and abolish the charge altogether.
“The UK has a proud history of retail share ownership, but this must be protected and nurtured,” said chief executive officer Richard Wilson. “Pension companies are increasingly cost conscious, and stamp duty is another unnecessary barrier to investing in UK shares.”
The comments point to a plunge in pension funds’ holding of UK equities in the past two decades and a mass migration to fixed income assets. The move has in part been triggered by tax tweaks rolled out in the early 2000s.
Interactive Investor said that its average investors in investment trusts paid £100 in stamp duty per purchase.
“We are only halfway through 2023 and these customers have already paid an average of £100 in stamp duty on investment trust purchases,” the firm added. “This is an issue that’s really hitting customer’s pockets, and penalising them for choosing one product over another.”
The calls come as City figures and ministers mull ways to get more cash flowing into domestic equities. The M&S chair Archie Norman is spearheading a campaign to get retail investors back into the market, including proposals to boost digital AGMs and engagement with shareholders.