REITs arrived in the UK on New Year's Day to a broad and warm welcome. It was also belated: the government proposed REITs for the UK as far back as 1997, writes Robert Liebman.

REITs are already well established in America, Australia, Belgium, Bulgaria, Canada, Holland, Hong Kong, France, Japan, Singapore, Turkey and several other countries.

With a REIT - real estate investment trust - at least 90 per cent of the company's taxable income must be distributed to shareholders. In return, the company is exempt from corporation tax on its property rental income and capital gains on property sales.

Less money for the treasury and the tax man directly translates into more money for investors. But when you invest in a REIT, you buy and sell shares in a quoted company.

You are a step removed from directly owning actual property; the company owns - and, significantly, manages - the income-producing office blocks, shopping malls and the like.