Letter: Stamp duty and capital gains are hampering the UK market

To avoid the ‘Jurassic Park’ label you warn about in your editorial ‘How to revive London’s flagging stock market’ (FT View, FT Weekend, January 8), London markets are demanding action from investors, regulators and the government.

US stock exchanges do not charge stamp duty. In the UK, most private investors risk capital gains tax (CGT) of 18-28%. Without stamp duty and with a lower CGT (say less than 5%), private investors could trade more efficiently and place much more emphasis on growth than dividends.

This would benefit the start-up and technology sectors. The loss of tax from CGT at the higher rate would likely be offset by an increased volume of CGT at a lower level due to more frequent exchanges.

An illustration of the dearth of high-tech companies in the London market is contained in the recent history of Arm Holdings, acquired by SoftBank a few years ago and now listed again. He was treated as a pawn in a financial game rather than a serious part of the British economy.

And as the majority of UK shares are held by funds, the bonuses managers and executives earn for taking up means there is little resistance to such offers, while the government hides behind a cloak of invisibility. .

The British press reported this month that British citizens have saved £1.7 billion during the pandemic; the UK stock market is valued at around £3.8 billion.

If savers were encouraged to divert some of this cash to the stock market, many of the current problems could be overcome.

The result could help to level up. Wealth would be distributed more equitably.

Derek Coggrave
London N3, UK

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