A prominent investment industry body has urged the incoming Prime Minister, Andy Burnham, to abolish stamp duty on share trading, arguing the move is crucial to revitalise the UK's stock market. The Association of Investment Companies (AIC) made the call this week, just days before Mr Burnham is set to officially take office next Monday, 20 July 2026.
The current 0.5% levy on share purchases has long been a point of contention for market participants, who contend it acts as a disincentive to investment and hampers the competitiveness of London's financial markets. Proponents of its abolition suggest that removing the tax would encourage greater trading activity, attract more capital to UK-listed companies, and ultimately strengthen the domestic economy.
The AIC's intervention highlights growing pressure on the new administration to implement policies that support the financial sector and broader economic growth. With Mr Burnham taking the helm, his government will face immediate scrutiny over its approach to business and investment, particularly as the UK navigates ongoing economic challenges.
While the immediate financial implications for the Treasury would involve a loss of revenue from stamp duty, the AIC's argument hinges on the potential for increased economic activity and other tax revenues to offset this. They suggest that a more vibrant stock market could lead to higher corporation tax receipts and capital gains tax from increased investment returns.
The proposal will likely spark debate within government circles and among opposition parties. While some may view it as a necessary step to boost the UK's standing as a global financial hub, others might raise concerns about the impact on public finances or the fairness of a tax cut that primarily benefits investors.