Barnett Waddington has pointed out today that section 5.67 of the Red Book states: Stamp Duty and Stamp Duty Reserve Tax – The government is extending the Growth Market Exemption, a relief from Stamp Duty (SD) and Stamp Duty Reserve Tax (SDRT), to include smaller, innovative growth markets. It will also increase the threshold for the market capitalisation condition that is used within the exemption from £170 million to £450 million. These changes will be included in the Autumn Finance Bill 2023 for implementation from 1 January 2024.
Matt Tickle, Chief Investment Office at independent consultancy Barnett Waddingham, comments: “Hidden in the little red book is some good news which deserved to make the cut for the speech. The Chancellor is going to extend the relief from Stamp Duty on shares. It will now include smaller, innovative growth markets, as well as increase the threshold for the market capitalisation condition that is used within the exemption from £170 million to £450 million. These changes are set to be implemented from 1st January 2024.
“The UK’s approach to levying stamp duty on shares is very much a global outlier. Whilst a few other countries do tax share purchases in this way, very few tax them at anywhere near the rate the UK does. International investors allocate their capital based on where they think they’ll get the best returns, after taking risks into account. Reducing stamp duty on UK shares should boost the overall returns from UK shares and contribute to an increase in foreign investment into the UK. It could also encourage some domestic investors to repatriate funds from overseas. Solving this issue is a small but sensible step towards making the UK a more attractive place to invest once again.”
