For immediate release Wednesday 30 August 2006

Stamp Duty on share purchases – a tax on all savers

Responding to the Shadow Chancellor’s recent announcement of plans to abolish stamp duty on shares, Richard Saunders, Chief Executive of the Investment Management Association said,

“Stamp duty is a tax on savers, and particularly affects small investors.  Over time it reduces the value of pensions, ISAs and other forms of saving: over a 20 year period a £50,000 pension pot would attract stamp duty costs of around £7,000.  Its abolition would remove a serious impediment to long term saving.  It is therefore most welcome that George Osborne has indicated a readiness to abolish it.”

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Notes to Editors
1. The £7000 charge assumes a portfolio contains 40% UK equities, with annual turnover of 100% and total return (before stamp duty) of 7%.
2. For the tax year 2004 – 2005 Stamp Duty receipts on share purchases were £2.7 billion.  Source: HMRC.

For further information please contact:
Mona Patel, Head of Communications - 07834 089 332