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Reits to go ahead this month

Chancellor Gordon Brown has used his pre-budget statement to announce legislation on Real Estate Investment Trusts.

The Conservatives called on Mr.Brown last month to introduce Reits to ensure the UK is not left behind other countries. Industry speculation had suggestsed the Chancellor may have left Reits out of his pre-budget statement because of concerns over loss of tax revenues.

Mr.Brown said: “To widen the number of investors in the residential and commercial property markets, we will this month publish legislation to set up in Britain Real Estate Investment Trusts that will increase the funding of new property developments.”

Ernst & Young real estate tax expert Peter Beckett says: “The promise of legislation to bring in Reits is very good news, after a period of hesitation. I hope the rules will be simple and clear enough to attract the private investment the Chancellor said he wanted in this area.”

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Strong dollar can be a powerful driver of UK dividend growth in 2015

By Robin Geffen, fund manager and CEO 

This year threatens to be a challenging one for UK dividend hunters. Last year saw an all-time record amount paid out in UK dividends — some £97.4bn, according to research from Capita Dividend Monitor. Yet as Capita also pointed out, out the biggest single factor driving the growth in the fourth quarter of last year was easy to identify: the rising US dollar. 

In our view, this trend is much more than simply a one-quarter phenomenon. It is actually the most profound issue to get right as a UK equity income investor in 2015. We believe that the US dollar will continue to strengthen significantly from its current level. This is due more to the US economy’s demonstrable de-coupling from the rest of the world than to a view on the UK. The US has a strong chance of tightening monetary conditions this year without jeopardising growth or de-stabilising its housing market. The same can unfortunately not be said about the UK.

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