• City bosses: Political parties must include pledge to ditch levy in manifestos
• Investors pay 0.5% in stamp duty on the price of UK-listed shares they buy
• The tax does not apply to purchase of shares in foreign firms

Investment companies are calling for stamp duty on share trading to be scrapped to revive the London stock market and wider economy.

The bosses of Abrdn, AJ Bell, Hargreaves Lansdown and Interactive Investor told The Mail on Sunday the main political parties must include a pledge to ditch the levy in their manifestos ahead of the General Election.

Investors pay 0.5 per cent in stamp duty on the price of UK-listed shares they buy – but the tax does not apply to the purchase of shares in foreign firms.

It means a saver who buys £10,000 of shares in FTSE 100 drugs giant AstraZeneca pays £50 in tax – but nothing to make the same investment in US-listed Amazon. Richard Stone, boss of the Association of Investment Companies, described the levy as ‘a tax on London’ that was handing rival financial centres an advantage.

Abrdn chief Stephen Bird branded the tax ‘as unpatriotic as it is economically destructive’ and said ‘its removal could be the single biggest boost to UK share ownership’.

And AJ Bell boss Michael Summersgill said abolishing stamp duty was ‘a no-brainer’, while head of Interactive Investor Richard Wilson warned: ‘We are taxing the stock exchange out of existence.’

The calls to scrap the tax – which is set to raise £3.2 billion this year and £23.7 billion between now and 2028-29 – come amid fears that the London stock market is losing its lustre. Having already seen Cambridge-based microchip maker Arm list in New York, the City faces an uphill battle to convince consumer goods producer Unilever to float its £15 billion ice cream business in London rather than in Amsterdam or on Wall Street.

At the same time, foreign buyers are circling the London stock market on the hunt for undervalued companies they can snap up on the cheap.

Attempts to turn the situation around – such as the launch of a British Isa and plans to sell NatWest shares to the public – are seen as not going far enough.

Now senior City figures have turned their focus on stamp duty on shares, demanding stamp duty is scrapped by whoever forms the next government. Dan Olley, boss of Hargreaves Lansdown, said: ‘We need to make it easy for people to save and invest for a better future.

‘It’s illogical for investors buying UK shares to have to pay stamp duty when overseas trades are stamp duty-free. We’re out of line with the G7 and need to level the playing field for UK plc.’

Bird, who has led Abrdn since 2020, said that while successive governments had adjusted stamp duty on property to boost the housing market, investors in the UK ‘have not had the same signals that share ownership is a habit worth supporting’.

He added: ‘Home ownership has become central to how Britons think about their economic lives – an impulse that governments past and present have harnessed with measures like stamp duty holidays on property purchases.

‘But if we are to help build the nation’s financial resilience, we also need to harness an investing culture. Scrapping stamp duty on UK shares would encourage more people to invest and act as an important signal of intent.

‘By penalising investors who want to buy British, stamp duty is as unpatriotic as it is economically destructive. Unchanged at 0.5 per cent since 1986, while other investing costs have fallen dramatically, stamp duty now represents a completely disproportionate cost.’

Summersgill said: ‘It’s a no-brainer. You should abolish stamp duty on shares. This will open the door to more GDP growth.

‘If you look at it with a rational mind, you would say ‘Why would I not do that?’ Stamp duty on shares is about £3 billion of the Government’s tax take. That’s 0.3 per cent. If someone came to me and said we could boost our business by scrapping a charge that made up 0.3 per cent of our revenues, it would be one of the easiest decisions I’d make.’

Writing for The Mail on Sunday, Wilson said: ‘We are taxing the stock exchange out of existence. Why are we penalising investors for investing in UK shares, especially at a time when we want to encourage more of them to back Britain? It simply does not make sense.’

• Go to thisismoney.co.uk/wilson to read more by Richard Wilson