CMIT proposes tax relief to support London's stock market

CMIT has submitted proposals to the UK Treasury to draw capital into London's stock market, City AM and Business Matters reported on October 11, citing The Sunday Times.

The group, chaired by London Stock Exchange chief executive Julia Hoggett, proposes exempting pension funds and individual savings accounts, or ISAs, from stamp duty on share transactions. The tax currently raises about 3 billion pounds annually, so the proposal seeks targeted exemptions rather than its complete abolition.

Another proposal is inheritance tax relief for pension money invested in UK assets over a 15-year period. The group also proposes a 10 percent tax credit on pension fund dividends. It estimates that this could mobilise up to 125 billion pounds in equity by 2042, at an annual Treasury cost of up to 742 million pounds.

CMIT argues that a shortage of new share listings and the departure of companies for other markets constrain British business growth. The proposals were submitted ahead of the Budget and are not adopted tax changes. Business Matters reported that the Treasury declined to comment on Budget speculation, while saying that stamp taxes on shares remained under review.