Insurance News Archive

Budget provides "good news" for property investors

Gordon Brown, in his 11th and probably final Budget, announced some impending changes to tax on rental income with some investment trusts which will likely be welcomed by prospective investors.

New legislation will see cuts to the tax disadvantages to rental income for authorised property investment funds provided by open-ended investment firms.

This will bring them into line with many tax advantages of real estate investment trusts, however there was no deadline set for the new rules to come into force.

Gerry Ferguson, head of UK property fund management at Scottish Widows Investment Partnership, told Reuters news agency that the plans were "good news" for the sector.

By creating tax parity between Reits and AIFs investors will have more choice and according to Mr Ferguson, the government will be therefore making it a "level playing field".

Investment into property through unit trusts is continuing to rise and, according to the Financial Times, there is now a choice of 15 funds on the market, up from just four a couple of years ago.

23 Mar 2007