Yields of up to 8%! 2 UK dividend shares I plan to never sell

These UK shares are leading players in their industries. I think they will deliver market-beating passive income for years to come.

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I plan to hold these UK dividend shares in my portfolio for all time. Here is why.

Tritax Big Box REIT

Real estate investment trusts (or REITs) like Tritax Big Box (LSE:BBOX) can be great ways to make a passive income. In exchange for certain tax advantages, these property stocks have to pay at least 90% of annual rental profits out in the form of dividends.

This particular REIT was the first one I bought for my own portfolio. And it’s one I plan to cling onto as the steady growth of e-commerce drives demand for its properties. Tritax owns and operates the warehouses and distribution hubs that are essential in getting companies’ products to customers.

This is a market in which supply is failing to keep up with demand growth. In fact, like-for-like rents here accelerated to 3.6% in 2022 as the property shortage worsened, up from 3.3% the year before.

A fresh update from sector peer SEGRO illustrates the robustness of Tritax’s market despite tough economic conditions. On Thursday it said that “occupier demand continues to be high and is coming from a diverse range of customers, whilst supply remains limited across all our markets”. As a result it reported “strong” rental growth in the first quarter.

Poor investment decisions (like building an asset in the wrong place) is a constant danger that can erode shareholder value. But encouragingly Tritax has a terrific track record on this front. I expect the business (which carries a healthy 4.8% dividend yield for 2023) to be a decent income generator for years to come.

Legal & General Group

FTSE 100 business Legal & General Group (LSE:LGEN) is the latest UK share I’ve bought. Following recent share price weakness I considered its tremendous all-round value too good to ignore.

Right now the insurer trades on a forward price-to-earnings (P/E) ratio of 7.5 times. It also carries a brilliant 8% dividend yield for 2023.

Of course yields are based on brokers’ dividend predictions. And there’s a danger that shareholder payouts might fall short of forecasts as the global economy slows and consumer spending cools.

But encouragingly, Legal and General has a terrific record of paying above-average dividends in good times and bad. This is thanks to excellent cash generation and a balance sheet that remains rock solid. The firm’s Solvency II capital ratio leapt to 240% as of the start of March, well above regulatory requirements.

I think that current dividend forecasts look quite realistic. And I’m confident profits and dividends here could rise strongly over the next decade.

Thanks to key demographic and economic changes like rising life expectancy and increasing emerging markets incomes, demand for Legal & General’s products could be on course to boom.

Statista, for example, believes the global life insurance market will grow at an annualised rate of 9% through to 2026 thanks to such drivers. Legal & General’s wide geographic footprint and excellent brand strength should allow it to grab such opportunities by the horns.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has positions in Legal & General Group Plc and Tritax Big Box REIT Plc. The Motley Fool UK has recommended Tritax Big Box REIT Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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