Xavier Rolet, Chief Executive of the London Stock Exchange, on why smaller growth companies “”not a mortgage, but equity funding”, and on the reforms needed to encourage equity investment in those companies:
“There…remain important structural reasons that are holding back private investors from funding our growth companies. Arguably the most significant is the tax treatment of equity: taxed at purchase, dividend and sale, in addition to the corporation tax paid on company profits, equities are treated aggressively while debt is often tax-deductible. Reducing tax on capital gains made from direct and indirect investment in smaller companies would also help boost liquidity by attracting more investors. And, a targeted abolition of stamp duty for Aim and PLUS-quoted shares would be a particularly low-cost and effective measure to promote growth.”
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