The Association of Investment Companies (AIC) has called on incoming Prime Minister Andy Burnham to abolish the UK's 0.5% stamp duty on share transactions, arguing the tax is driving foreign capital away from London and threatening the city's status as a global financial hub.
The industry body's intervention comes as Burnham prepares to assume the premiership on Monday.
The AIC contends that the levy, which applies only to UK equities, creates a structural disadvantage for British stocks compared to peers in other major markets where such transaction taxes have been removed or never existed.
The group warns that without reform, the UK risks being taxed "into oblivion" as investors increasingly favor jurisdictions with lower friction costs.
This push for fiscal reform aligns with broader concerns about the competitiveness of the UK equity market.
The AIC argues that the stamp duty acts as a drag on liquidity and valuation, particularly for smaller companies that rely on active trading to maintain price discovery.