The government will abolish stamp tax on shares for companies listed on growth markets, including the London Stock Exchange’s Alternative Investment Market and the ISDX Growth Market, from April 2014.
In scrapping the Aim stamp duty tax, chancellor George Osborne said in his Budget today (20 March) he is aiming to help smaller quoted UK firms by lowering their cost capital, helping to promote jobs and growth across the country.
Mr Osborne said: “Many medium sized firms and start-ups use the Alternative Investment Market to raise funds to help them grow.
“Many observers of the British tax system complain that it has long biased debt financing over equity investment.”
He added: “In parts of Europe they’re introducing a financial transaction tax. Here in Britain, we’re getting rid of one.”
Richard Croker, head of tax at law firm Cameron McKenna, warned that the announcement “sounds better than it is”.
He said: “In practice only a small fraction of the traffic in listed shares is on Aim and the main market is unaffected. The abolition of the schedule 19 SDRT charge on redemption of units in collective investment schemes is probably more significant - and may be worth the fund industry’s long wait.”
On 13 March 2013 the Government launched a consultation on extending individual savings account (ISA) eligibility to include a wider range of small company shares.
