The government is poised to reap a £1bn windfall from the boom in stock market dealing because of the imposition of stamp duty on share purchase, reports The Times.

Industry estimates suggest the total sum raised by the Exchequer from the 0.5% duty levied on share purchases could reach £3.5bn in the current tax year, far exceeding the estimates of the Stamp Office and the £2.2bn collected in 1998-99. The London Stock Exchange said the total value of bargains struck in the final three months of last year leapt by 40% to £361bn. As market makers and certain other groups are exempt, this implies a stamp levy of almost £1bn for a single quarter.