Hopes that supermarket groups and pub operators could turn themselves into tax-efficient property trusts were dashed by the Chancellor yesterday.

The Treasury announced new rules on Real Estate Investment Trusts to prevent companies that were not pure property investment businesses converting to REIT status to avoid tax.

Charles Beer, senior partner at KPMG, said, 'The Chancellor has taken action to prevent the potential loss of hundreds of millions in tax.'

Ministers had become increasingly concerned that property-rich businesses like pub groups and supermarket groups could restructure themselves into REITs, he said.

The Times