Stamp duty on UK shares has dissuaded four in 10 from investing
New interactive investor research delves into the real impact of this ‘lose-lose’ tax.
22nd April 2024 15:36
by Camilla Esmund from interactive investor
- 82% of investors polled said stopping the stamp on UK shares would encourage more investment in UK-listed companies
- 57% of investors polled said stamp duty would make them think twice about investing in UK shares in the future
- interactive investor has long called for the removal of stamp duty on UK shares and will continue to do so
Two new polls which surveyed almost 2,000 investors overall* by interactive investor, the UK’s second-largest investment platform for private investors, reveal a strong desire among investors for stamp duty applied to purchases of UK shares to be scrapped.
- Invest with ii: Open a Stocks & Shares ISA | ISA Investment Ideas | Transfer a Stocks & Shares ISA
Almost four in 10 (37%) investors surveyed said they had decided against investing in UK shares in the past because of stamp duty, according to one poll of 891 investors who visited the interactive investor website on 17 April 2024. In addition, the majority (57%) claimed that it would make them think twice about investing in UK shares in the future.
The overwhelming majority of those polled believe that the tax is souring appetite for the UK market, with 82% of respondents claiming that reducing or eliminating stamp duty on UK shares would encourage more investment in UK Plc.
Stamp duty on UK shares: how much awareness is there?
A separate interactive investor poll involving a sample of 1,032 investors who visited the interactive investor website on 16 April 2024 showed that 53% of investors have considered the implications of the tax when mulling over investment in UK shares.
However, only 27% of investors said they understand how stamp duty works, and 41% of the sample said they were unsure or don’t know the current rate of stamp duty to UK shares. This lack of clarity for investors is also a concern.
Stop the Stamp!
Richard Wilson, CEO, interactive investor, says: “Our research is a snapshot but is indicative of a wider issue which deserves urgent attention. The overwhelming majority of investors think that stamp duty is an unnecessary barrier that penalises people for backing British shares – and we couldn’t agree more! This demonstrates the real cost to UK plc.
“This is a pernicious tax that penalises listed companies that help put the ‘great’ in British business. Can we really be OK with a tax that dissuaded four in 10 investors, according to our poll, from investing in UK shares? What’s more, the majority of respondents say that it will make them think twice about investing in UK shares in the future. Is this really what we want for the UK market?
“It’s a lose-lose tax. Higher transaction costs due to stamp duty also undermines market liquidity, which is the lifeblood of an efficient stock market. As the UK grapples to maintain its competitiveness, stamp duty is a big barrier to investment and growth, damaging the health of the broader UK economy.”
*Almost 2,000 website visitors (total across both polls) were polled in two separate polls on the interactive investor website on 16 and 17 April 2024.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.