A. If you are a UK resident for tax purposes, you are subject to UK tax on your worldwide income and capital gains. It doesn't matter whether your properties are located in Manchester or Mongolia.

You may also be subject to tax in the country in which the property is located. However, the UK has double tax treaties with many other countries. Such treaties determine which country has the right to tax you and in what circumstances.

In many cases, the overseas country in which the property is located has the right to tax you first. Any overseas tax paid is usually then allowed as a credit against your UK Income Tax or Capital Gains Tax. The net result, generally speaking, is that you end up with a total tax bill equal to the higher of the two countries' taxes, but not both added together.

A. Commercial property qualifies for a variety of different tax reliefs. Perhaps the most important one is business asset taper relief.

What this means is that, in most cases, if you sell a commercial property after just two years, 75% of the profit is completely tax free. Compare that with ordinary residential property where the maximum tax relief is 40% and you have to wait ten years to get it!

A. There are many reliefs and deductions you can claim and there is plenty of scope for constructive capital gains tax planning. For more information get hold of a copy of the 2006 edition of the bestselling guide How to Avoid Property Tax in the RLA Tax Centre.

A. Generally, no. However, there are some exceptions to this rule.

If both the old property which you sell and the new property which you purchase qualify as relevant business property, you may 'roll over' the gain on the sale of the first property if you reinvest your sale proceeds into the new relevant business property at some time during the four-year period which commences one year before the sale of the old property. (Generally, therefore, this means reinvesting the proceeds within three years after the sale.)

For landlords, the following properties will be the main types of 'relevant business property' for this purpose:

• Furnished holiday lettings
• Properties run as a guest house, hotel or other type of serviced accommodation
• Your own business premises used to run a qualifying trade (not property investment - but perhaps property development or property management).

The amount of 'roll over' relief available is restricted if the property sold was not 'relevant business property' throughout your ownership or if not all of the sale proceeds are reinvested in the new property.

Interestingly, though, there is no minimum period for which the new property must remain 'relevant business property'. (It must be bought with the intention of holding it for this purpose for the foreseeable future however.)

Hence, for example, an investor might sell a furnished holiday letting property and reinvest the proceeds into a new property which they run as a guest house for, say, two years, before perhaps changing its use to a long-term letting.

Remember that roll over relief only defers capital gains and they become chargeable once more when the new property is sold. (Still, you could be in Australia by then and thus perhaps exempt from UK Capital Gains Tax!)

A. You can deduct your legal fees (for selling AND buying the property), the stamp duty you paid when you bought the property, estate agent's commission and any other direct buying or selling costs.

You can also deduct the cost of any improvements you have made to the property, for example the cost of building an extension or adding an extra bedroom with a loft conversion.

The difference between repairs (allowed as an income tax deduction) and improvements (allowed as a capital gains tax deduction) is an important one for any serious property investor.

A. The longer you hold assets the more taper relief you get. For example, if you sell a property after three years, you qualify for the minimum of 5% taper relief, whereas if you hold a property for ten years or more you qualify for the maximum of 40% taper relief.

Example
Richard buys a property for £100,000 and sells it after ten years for £300,000. Ignoring various costs his capital gain is £200,000. His taper relief is 40% of this amount: £80,000. In other words, he does not have to pay any capital gains tax on £80,000 worth of profit.

Some assets such as certain commercial property qualify for 75% taper relief after just two years!

A. This is a question we get asked all the time. It’s not so much the ‘quantity’, or length of occupation, but the ‘quality’ of occupation, that matters. In other words, the property must genuinely become your main residence.

A. There's lots you can do. For example, you can split your rental income with your spouse, or ensure that all of it is taxed in his or her hands. If you're married, or in a registered civil partnership, you can even do this without putting your own stake in the underlying properties at risk. You can keep 99% ownership but your spouse or civil partner can be taxed on half the income. That's what we call 'Have Your Cake and Eat It'.

If you have furnished lettings, don't forget to claim either the 10% wear and tear allowance or your renewals and replacements expenditure.

Timing is also very important - landlords are always taxed on a tax year basis, so 5th April is a very important date. Each year, as this date approaches, it is worth thinking about whether there's any expenditure which you can accelerate to before the tax year end, thus giving yourself tax relief a whole year earlier. Remember that, for most landlords, it's the date the expenditure is incurred that matters, not when it's paid for!

Those aiming to build larger property portfolios over a longer period may do well to consider putting properties into a company, thus exchanging 40% Income Tax for 19% Corporation Tax in most cases. Beware though, this only works well when you have other sources of income, as the tax on withdrawing profits from the company can be quite punitive. That 'other source' could be a second property portfolio though!

A. You can claim literally hundreds of expenses. Some of the main deductions include:

• Interest on mortgages
• Property maintenance and repairs
• Insurance costs
• Letting agent's fees
• Administrative expenditure

The main point to bear in mind is that all expenses must be incurred wholly and exclusively for the purposes of the property business.

Administrative expenditure can include motor expenses, office costs, travel and subsistence, and training and research.

A. The main reason to use a company to invest in property (or for any business) is that corporation tax rates are approximately half as high as income tax and capital gains tax rates. However, to derive significant tax savings from using a company, you have to be reinvesting your profits year after year rather than paying them out as dividends or salary. Our calculations at Taxcafe show that, if you use a company, you could end up with as much as 47% more profit after a few years.

A. Like anything in tax there are benefits and drawbacks. For example, using a company to invest in property might not be a good idea if you already use a company for a non-property business. You also have to be careful about extracting all your profits each year as this may result in further income tax bills.

A. Despite all the talk in the papers about heavy levels of red tape for businesses starting and running a company in the UK is cheap and easy.

It costs about £100 to set one up and to have a set of annual accounts produced can end up costing no more than £500.

More information about using a property company is contained in the guide 'Using a Property Company to Save Tax' in the RLA Tax Centre