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Govt is set to give Reits green light

The Government has given its strongest indication yet that it will give real estate investment trusts the go-ahead in the autumn’s pre-Budget report.

In his first newspaper interview since taking on the role in May, Treasury Economic Secretary Ivan Lewis says he is personally committed to making rapid progress in this area and is “very hopeful” that Reits will be included in the pre-Budget report.

The comments come after industry speculation of delay to legislation because of Government concerns about loss of revenue due to the tax breaks and other Treasury demands taking priority.

If Reits are included in the pre-Budget report, which is expected in late November, they will then form part of next year’s Finance Bill.

Reits are already in operation in Australia and the US, with Germany committed to introducing them next year. There were fears that further delays would lead to the UK falling behind European rivals.

Lewis says: “I am very hopeful that we will be saying something about Reits in the pre- Budget report and I am personally committed to achieving rapid progress in this area.”

AITC spokeswoman Jemma Jackson says: “It is important to get the structure of Reits right to make sure they do not end up like housing investment trusts. But the Government has consulted widely on the issue and, provided it can make tax rules attractive to both providers and investors, we are delighted with this statement on early progress from the minister.”

Hargreaves Lansdown senior investment analyst Meera Patel says: “Reits will be a popular investment for IFAs bec-ause of the tax benefits and the potential to be used in a fund of fund to improve asset allocation and should be welcomed long term although they will be less attractive short term because of the current UK property market.”

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