Chancellor to face heat from Stock Exchange over stamp duty

There is no stamp duty in the US, while the UK suffers from the highest rates in the world and evidence is accumulating that more and more companies are listing in New York in order to avoid payment.

The rates of stamp duty have been used recently by German telecoms group Mannesmann in its defence against Vodafone AirTouch’s bid, because repatriating shares gives rise to a 1.5% exit fee.

America has become increasingly attractive in recent years as a deep capital market where raising large sums is relatively easy.

Although London is still an important market, the use of electronic trading has led to falling charges for deals and in turn has made the stamp duty an ever-larger hurdle to overcome.

It was reported in today’s Daily Telegraph that the Stock Exchange is preparint a budget submission calling for the tax to be scrapped because it represents a threat to the City.

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