UK Crypto Tax for Stock Boost
- taxing cryptocurrency purchases could encourage britons to invest in local stocks, perhaps boosting the UK economy, according to lisa Gordon, chair of an investment bank.
- Gordon expressed concern over the popularity of cryptocurrency among younger investors.It should terrify all of us that over half of under-45s own crypto adn no equities, she stated...
- Currently, the UK levies a 0.5% tax on shares listed on the London Stock Exchange, the contry’s largest securities market.
UK Should Tax Crypto to Boost Local Stocks, Says Investment Bank Chair
Table of Contents
- UK Should Tax Crypto to Boost Local Stocks, Says Investment Bank Chair
- Boosting UK Stocks: Should Crypto be Taxed?
taxing cryptocurrency purchases could encourage britons to invest in local stocks, perhaps boosting the UK economy, according to lisa Gordon, chair of an investment bank.
Gordon expressed concern over the popularity of cryptocurrency among younger investors.It should terrify all of us that over half of under-45s own crypto adn no equities,
she stated in a March report. She proposed a shift in tax policy, suggesting, I would love to see stamp duty cut on equities and applied to crypto.
Currently, the UK levies a 0.5% tax on shares listed on the London Stock Exchange, the contry’s largest securities market. this tax generates approximately 3 billion British pounds ($3.9 billion) annually.
Gordon believes that reducing the tax on equities could incentivize individuals to invest in shares of domestic companies. This, in turn, could encourage more companies to go public in the UK, thereby stimulating the economy.
She characterized cryptocurrency as a non-productive asset
that doesn’t feed back into the economy.
In contrast, she argued for the benefits of equities:
Equities provide growth capital to companies that employ people, innovate and pay corporation tax. That is a social contract. We shouldn’t be afraid of advocating for that.
The Financial Conduct Authority (FCA) reported in November that crypto ownership had risen to 12% of UK adults, representing about 7 million people. A significant portion, 36%, of crypto owners were under 55 years old.
Gordon noted a trend of individuals shifted to saving rather than investing,
which she argued is not going to fund a viable retirement.
A 2022 FCA survey indicated that 70% of adults had a savings account,while 38% held shares directly or through an account. This allowed for nearly 20,000 British pounds ($26,000) of tax-free savings per year. The survey also revealed that approximately three in four 18- to 24-year-olds held no investments.
However, a subsequent survey by the regulator showed that the cost of living crisis in the 12 months leading up to January 2024 had caused 44% of adults to either stop or reduce saving or investing. Nearly a quarter of adults used savings or sold investments to cover daily expenses.
Gordon is a member of the Capital Markets Industry Taskforce,a group of industry executives focused on revitalizing the local market.
London Stock market Performance
Consulting firm EY reported in January that the London stock market experienced one of its quietest years on record
in the past year, with only 18 companies listing, a decrease from 23 the previous year.
EY also noted that 88 companies delisted or transferred from the exchange, citing reasons such as declining liquidity and lower valuations compared to other markets
like the U.S.
Despite this, Gordon asserted that the UK is a safe haven
compared to markets like the U.S.,which has faced market volatility due to factors such as tariff concerns and recession fears.
Cryptocurrency markets have also experienced declines,with Bitcoin (BTC) trading down 11% over the past 30 days and struggling to maintain support above $85,000 as early March.
As of the past 24 hours, Bitcoin is up 2%, trading around $85,640.
Boosting UK Stocks: Should Crypto be Taxed?
Introduction: UK Crypto Tax and Investment Strategies
This article explores the debate surrounding the taxation of cryptocurrency in the UK and its potential impact on the local stock market. We’ll examine the perspectives of industry leaders, consider current market trends, and discuss the potential consequences of different policy choices. The article also covers UK crypto taxes.
Why Tax Crypto?
what are the main arguments for taxing cryptocurrency in the UK?
Encouraging investment in local stocks: Lisa Gordon, chair of an investment bank, suggests taxing cryptocurrency purchases coudl encourage Britons to invest in local stocks, potentially boosting the UK economy.
Addressing concerns about younger investors: Gordon expresses concern about the popularity of cryptocurrency among younger investors, with over half of under-45s owning crypto and no equities. This shift is seen as a potential risk to long-term financial security.
Crypto as a “non-productive asset”: Gordon characterizes cryptocurrency as a “non-productive asset” that “doesn’t feed back into the economy,” in contrast to the benefits of equities.
Potential additional revenue: taxing crypto could generate revenue that could be used to support the UK economy.
How would taxing crypto impact the UK economy?
Increased investment in UK companies: By reducing the tax on equities and applying it to crypto, individuals might be incentivized to invest in shares of domestic companies.
Economic stimulation: Increased investment could encourage more companies to go public in the UK, stimulating the economy.
Job creation and innovation: Equities provide growth capital to companies that employ people, innovate, and pay corporation tax. Investment in equities supports these activities.
How does this impact the London Stock Exchange?
Revitalizing the local market: The Capital Markets Industry Taskforce aims to revitalize the local market. Tax incentives could attract more investment.
The current State of UK Investment
Currently, the UK levies a 0.5% tax (Stamp Duty) on shares listed on the London Stock Exchange.
What are the alternative views?
Reducing the tax on equities could incentivize individuals to invest in shares of domestic companies.
What are the current trends in UK investment behavior?
Shift towards saving: Gordon notes a trend of individuals “shifting to saving rather than investing,” which she argues is not going to fund a viable retirement.
High savings account use: A 2022 FCA survey indicated that 70% of adults had a savings account, while only 38% held shares directly or through an account.
Lack of investment in younger adults: The same survey revealed that approximately three in four 18- to 24-year-olds held no investments.
What are the effects of the cost of living crisis?
Reduced saving and investing: A subsequent survey showed that the cost of living crisis in the 12 months leading up to january 2024 had caused 44% of adults to either stop or reduce saving or investing.
Using savings for expenses: nearly a quarter of adults used savings or sold investments to cover daily expenses.
Cryptocurrency and the UK Market
How popular is cryptocurrency in the UK?
Cryptocurrency ownership had risen to 12% of UK adults in 2024 representing about 7 million people.
A significant portion, 36%, of crypto owners were under 55 years old.
the FCA reported in November that crypto ownership had risen to 12% of UK adults.
London Stock Market Performance
What is the current state of the London stock market?
The London stock market experienced one of its “quietest years on record” in the past year.
Only 18 companies listed, a decrease from 23 the previous year.
What are the challenges facing the London Stock Exchange?
Declining liquidity and lower valuations: 88 companies delisted or transferred from the exchange, citing these as reasons.
Market volatility: The UK is a “safe haven” compared to markets like the U.S., which has faced market volatility.
summary of Key Points
| Issue | Current Situation/Proposal | Potential Impact |
| :—————————- | :————————————————————- | :———————————————— |
| Tax on Shares | 0.5% Stamp Duty on London Stock Exchange | Generates approximately £3 billion annually |
| Crypto Ownership | 12% UK adults own crypto (as of November 2024) | Potentially diverting funds from traditional assets |
| Investment behavior | Shift towards saving; low equity ownership among young adults | Reduced investment in domestic companies |
| Market Performance | Quietest year on record for London Stock Exchange listings | possible further decline in market activity |
| Suggested Tax Policy shift | Cutting stamp duty on equities and applying it to crypto. | May stimulate the economy |