UK chancellor may launch tax-free ‘British Isa’

A British stock Isa would let investors buy a certain amount of UK company shares, without paying tax

UK chancellor, Jeremy Hunt, has hinted at plans to launch a tax-free “British Isa” investing in UK company shares at the spring budget, as part of attempts to revive the country’s stock market.

A British stock Isa would let investors buy a certain amount of UK company shares, without paying tax. At present, the government charges a 0.5% tax, known as the share purchase stamp duty, for any shares bought in the UK.

It comes as the chancellor tries to find cost-free announcements that could help win over voters and businesses as the Tories lag well behind Labour in the polls before a much-anticipated general election.

The incentive, which some expected Hunt to announce as part of the autumn statement in November 2023, could also complement government plans to sell shares in NatWest, which is still 38.6% government owned since its taxpayer bailout in 2008, to retail investors later this year.

Hunt made the comments in front of City bosses, who were gathered in the Raffles hotel in Westminster for an annual dinner hosted by TheCityUK.

When asked whether he would consider a British Isa, Hunt said: So there is a certain category of questions that I am not really able to answer. Those are things that might appear in the budget. And that is one of them.

Do I want to do things that mean that more UK capital is invested in our most promising companies? Absolutely. I think that something like a British Isa could be very good at that, he added.

It comes as the City faces growing threats from rival financial hubs including New York, Paris, Frankfurt and Amsterdam, especially post-Brexit. London’s stock market has experienced an exodus of firms chasing capital outside the UK, with Flutter Entertainment, the owner of Paddy Power, Betfair and FanDuel, saying last week that it was considering moving its primary listing to New York “as soon as practicable”.