London: The UK’s tax authority plans to stop its recognition of the Moscow Stock Exchange, underscoring Russia’s increasing isolation from global financial markets following its attack on Ukraine.
The move means investors won’t be able to access certain UK tax benefits when trading securities on the Moscow bourse, although existing investments will be protected, HM Revenue and Customs said in a statement Tuesday. Revoking the status will limit access to some UK tax reliefs such as an exemption from withholding tax on some bonds.
The move is in response to restrictions the Bank of Russia has placed on foreign investors, HMRC said. The exchange banned brokers from selling assets for non-residents of Russia, which means that it is no longer operating in line with the standards expected of a recognized exchange, the authority said, noting it started a two-week consultation on the decision on Tuesday.
The past two months have seen the US, UK and the European Union respond with a wave of sanctions. Those threatened to tip the Russian economy into an economic crisis, but even with a recession looming and inflation approaching 20 per cent, the economy has for the moment defied the most dire forecasts thanks to stiff capital controls and plentiful petrodollars.
