‘ISA reform won’t work without scrapping duty on stocks and shares’
interactive investor CEO calls on the government to make stocks and shares exempt from stamp duty as part of ISA reform plans.
25th June 2025 15:33
The chief executive of interactive investor (ii), the UK’s second-largest DIY investment platform, has called on the government to make stocks and shares exempt from stamp duty as part of ongoing ISA reform plans and encourage investment in the UK stock market.
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With Chancellor of the Exchequer Rachel Reeves said to be considering the launch of a consultation on the ISA market, research from ii suggests that changes to the cash ISA will not be effective unless they are combined with other measures that incentivise people to put their money in the markets.
It is rumoured that the chancellor may use her next Mansion House speech in July to launch the review of how ISAs work, at a time when many voices across the financial sector are calling for the cash ISA allowance to be reduced to encourage people to invest more in stocks and shares.
But, in a poll of approximately 1,000 retail investors, a staggering 72% said that removing stamp duty on UK shares and trusts would incentivise them to invest more in UK assets. That compares to only 7% who said they would invest more into the stock market if the government lowered the cash ISA allowance – currently £20,000.
Richard Wilson, chief executive, interactive investor, says: “ISA reform is only one piece of the puzzle. If DIY investors are to be the boost to the UK stock market that the chancellor thinks they can be, she also needs to make UK stocks and shares more investable.
“Stamp duty on UK shares and investment trusts is an outdated and damaging tax from a bygone era that serves only to undermine the competitiveness of the UK stock market. At 0.5%, it penalises investors for backing British businesses, making the UK a less attractive place to invest compared to global peers. At a time when we should be encouraging investment in British companies and improving market liquidity, this tax does the exact opposite – driving capital elsewhere and draining liquidity from the market.
“We believe removing stamp duty on UK shares will help encourage retail investors to back the best of British businesses. And crucially, it will give us back our level playing field and let the London financial markets do what they do best: to compete, to innovate, and to win. If ministers are serious about revitalising the London market and boosting economic growth, this is an opportunity that shouldn’t be missed.”
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