Reeves plans stamp duty holiday in Budget to boost London listings
Chancellor Rachel Reeves is expected to announce a stamp duty holiday for new listings on the London Stock Exchange in Wednesday’s Budget as the government ramps up efforts to revive the index.
The move will wipe out the 0.5 per cent stamp duty tax investors are forced to pay upon buying shares that are newly listed in the UK, according to people familiar with the matter.
It will extend the current exemption from the day of IPO to up to three years after, in a bid to boost the number of listings, attract investors and stop businesses moving overseas.
Industry figures have been calling for the total abolition of stamp duty to lure both domestic investors and companies back from overseas markets, including New York, which offer greater tax incentives and regulatory environments.
Emma Wall, chief investment strategist at Hargreaves Lansdown, said: “If this Budget rumour proves accurate, it may be the carrot British businesses need to plump for a domestic listing.
“This would make buying British more enticing for investors and help redress some businesses’ concerns about demand for UK shares.”
IPO exodus
The rumoured plans come as the market begins to claw its way back from one of the worst IPO droughts the London index has seen in decades.
Just £184m was raised on the London Stock Exchange in the first nine months of the year, compared to the approximate £40bn raised by the US in the same period.
This marked 2025 as one of the worst years for listings and a far cry from the £17bn raised in the capital in 2021, which was one viewed as Europe’s premier listing destinations.
However, the City has seen signs of revival over the past month, as tinned tuna giant Princes and The Beauty Tech Group completed their IPOs and listed on the London market.
Princes hailed the move to float in London as a “natural next step”, while Beauty Tech Group chief executive, Laurence Newman, called the capital “the perfect platform” for profitable growth.
Princes shares have tumbled 6.74 per cent to 443p since listing last month, while The Beauty Tech Group saw shares fall by 1.91 per cent to 282.50p.
Other proposals
The scrapping of stamp duty tax is just one of the plans the Treasury is reportedly mulling for the Budget to create an investment culture similar to that of the US.
Reeves is poised to slash the cash ISA ceiling from £20,000 to £12,000 to stop Brits hoarding the cash, a move that will be welcomed by brokers and investment platforms.
The Chancellor is also debating a hike to dividend tax on stocks held outside of tax-efficient wrappers, in order to nudge investors into both stocks and shares ISAs or pensions.