On 20 February 2007 HM Treasury announced the implementation of three tax measures designed to enhance the competitiveness of the City of London. According to HM Treasury the measures will allow firms to benefit from opportunities offered by the liberalisation of financial regulation in the European Union, particularly the introduction of the Markets in Financial Instruments Directive (MiFID).
The three new measures are:
- From November 2007, HM Treasury will no longer require transactions in shares admitted to trading on a regulated market under MiFID to be reported to that market, or to those intermediaries to be members of that market, in order for intermediaries to benefit from stamp duty relief. The Government has already published draft clauses for consultation in advance of this year's Finance Bill.
- In addition to shares admitted to trading on a regulated market this approach will be extended to include shares admitted to trading on a multilateral trading facility. Before proceeding with this proposal, the Government is giving the FSA time to fully consider any possible regulatory implications which may arise from this change and will provide an update on progress at the Pre-Budget Report.
- HM Treasury proposes to modernise the definition of a Recognised Stock Exchange for tax purposes to allow shares traded on other regulated markets under MiFID to benefit from the same tax arrangements that currently apply only to the London Stock Exchange in the UK. The Government is to publish draft clauses in advance of this year's Finance Bill.