A company quoted on the stock exchange that exists only to invest in other companies.

What is a Reit?

It's a new type of company that allows investment in commercial or residential property to produce tax-efficient rental income. Ninety per cent of this income must be distributed to shareholders of the UK-Reit and, in return, the company is exempt from corporation tax and capital gains on property sales.

Who can invest in a Reit?

Anyone can buy shares in a Reit, much like a unit trust.

Why invest in a Reit?

Stephen Herring of accountants BDO Stoy Hayward says not only can the Reit avoid paying corporation tax and capital gains, but the investor can also avoid paying tax on their dividend income if their shares are held, say, in an ISA or a self invested personal pension (SIPP).

Any potential pitfalls?

Some experts argue the property market is nudging its peak so investing now might prove to be a mistake, despite the attractive tax breaks.

Daniel Godfrey, director general of the Association of Investment Trust Companies, apologised yesterday to his members for his handling of the split capital trust debacle.