(Bloomberg) -- Abrdn Plc suggested a middle ground on the UK stamp-duty debate, advocating for the levy to be scrapped on non-bluechip shares as calls for full abolition of the levy fade ahead of Chancellor Rachel Reeves’s first budget.
Extending the stamp duty exemption that currently exists for AIM – the London Stock Exchange Group Plc’s market for small and medium-sized companies – to all listed companies outside the FTSE 100 “could be a good starting point,” the asset manager said in an emailed statement.
“This would hopefully have a direct positive impact on investment into small caps – which would then support the argument for scrapping the tax entirely,” Abrdn added.
The budget statement, scheduled for Oct. 30, will define the new Labour government’s economic priorities for the coming year and detail how spending will be funded.
Calls from the LSE and several brokers to abolish the stamp duty reserve tax — a 0.5% levy on main-market dealings — have been drowned out since the July election by reports saying Reeves is looking at ways to raise tens of billions of pounds. Eliminating the tax would have a direct cost, as it earned the Treasury £3.8 billion ($4.9 billion) in fiscal 2023.
Efforts to see it scrapped have come amid London’s efforts to preserve its status as a leading international share-listing location, after some firms opted instead for New York and UK-equity funds were hit by persistent outflows.
--With assistance from Pablo Mayo Cerqueiro.
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