The Chancellor has suggested he could unveil plans for a pioneering tax-free ‘British ISA’ in his Spring Budget, intended to incentivise retail investment into domestic shares.
Addressing leading City figures this week, Jeremy Hunt indicated he would consider proposals for a first-of-its-kind British stock Isa enabling individual investors to buy UK company shares tax-free. Investors currently stump up 0.5% in stamp duty on share deals.
“Do I want more British capital backing our most exciting firms? You bet. I believe something akin to a British ISA could achieve that,” Mr Hunt commented.
The prospective move comes with the government striving to breathe life into the UK equity market as an exodus of firms opt for overseas listings. The FTSE 100 ended 2023 up 3.8% compared to the S&P 500’s 25%.
A British ISA could also dovetail with previously publicised plans to offload NatWest shares to retail investors this year. The state retains a 38.6% stake following the lender’s 2008 bailout.
However, the Chancellor stopped short of endorsing demands from trade bodies to abolish the 0.5% share stamp duty. Both a British ISA and scrapping the duty have been touted to galvanise domestic investment.
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In pre-budget paperwork, UK Finance urged officials to look into a British Isa while implementing Isa reforms from last Autumn’s fiscal statement.
Underscoring aspirations to make London the European haven for tech floats, Mr Hunt said: “We envision the London Stock Exchange becoming Europe’s Nasdaq.” Boosting such IPOs would form part of wider efforts to morph the UK into “the next Silicon Valley”.
The Spring Budget will be released on 6 March 2024.