UK listings relief

The new UK listings relief, which applies from 27 November, provides newly listed companies with a stamp duty reserve tax exemption for the first three years of their listing. The aim of this measure is to encourage more companies to list on UK public markets.

This follows on from the introduction of a variety of measures brought in by the previous government to make it more attractive for a wider variety of businesses to list in the City of London, including those with potentially riskier business models. The measure is projected to cost £25m in its first year, increasing to £35m, then £45m, before levelling out to £50m per year for all subsequent years. 

This move is welcome, says ICAEW’s Head of Corporate Finance, David Petrie, though he stressed that there is a risk that, as the taxation on dealing is removed for newly listed companies, they may see greater volumes of share trading. 

“This move may attract interest from hedge funds and other investors trading shares at very low cost and free of the usual 0.5% stamp duty. Accidentally increasing the volatility of stock in newly listed companies, particularly mid-cap businesses, would be an unwelcome consequence and might in fact serve as a disincentive to listing," he said.

"It will be interesting to see what impact this measure has and how it will be managed.”

ISA reforms to encourage retail investors

The Chancellor announced a package of ISA reforms to encourage more retail investment in equities, including a reduction in the cash ISA limit to £12,000 from April 2027, with a carve out for the over-65s. The stocks and shares ISA limit will remain at £20,000.

Annual subscription limits are maintained at £20,000 for ISAs, £4,000 for Lifetime ISAs and £9,000 for Junior ISAs and Child Trust Funds until 5 April 2031. The Help to Save scheme will be made permanent, and the government will consult on the implementation of a simpler ISA product for first-time house buyers in early 2026. 

The Chancellor aims to encourage more retail investors to put money into equity as opposed to cash. The UK market has seen considerable de-equitisation over the past few years, and this measure is intended to slow or reverse the shrinking of the UK stock market.

Ahead of the Budget, there were whispers of a possible imposition of restrictions on where retail investors could put their money, potentially pushing investors into buying UK-listed stock. In the end, the Chancellor decided against it. 

These measures will encourage longer-term retail investors to invest in an asset class that delivers better potential returns. Katerina Joannou, ICAEW’s Senior Manager – Capital Markets Policy, said the move was welcome, and it was good to see that there were no restrictions on where retail investors can put their money. 

“While we’re generally very much in favour of encouraging companies to list in the UK, people should be able to choose where to put their money to get the best returns for their investment,” she said.

“However, we might see softer pressure on wealth managers to prioritise British-listed companies. With the potential for more people to be brought into the UK retail investment market, good financial advice will be important. It remains to be seen how it will work in practice.”