Property investors with rising debt problems need to make sure they keep on top of their accounts and tax returns.

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Property investors who have received a letter from the taxman asking for a call about unpaid tax on income from property letting, then you need to speak to a property professional like Property Investment Expert.

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Special Purpose Vehicles and self builds are the latest tax loopholes saving property buyers a fortune by paying less stamp duty.

SPVs are companies or trusts that are set up for the sole purpose of owning a specific property – often a commercial building like a factory, warehouse or retail premises but more frequently houses and flats since the recent stamp duty changes.

The SPV buys the property and then the SPV is sold to the purchaser.

The net effect is stamp duty is charged at 0.5% on the purchase of shares in an SPV rather than at the full rate of stamp duty.

One of the most expensive properties on the market in London is a five bedroom house in Knightsbridge with a tag of £6.95 million.

Putting them property in to an SPV could save the buyer about £240,000 in stamp duty.

Paying le3ss stamp duty with an SPV is not for every property buyer – the process does incur costs in setting up the company to hold the property that do not make the arrangement practical for cheaper property purchases, but then they attract a lower rate of stamp duty anyway.

Another  stamp duty work round that everyone can profit from is a self build.

Buying the land and building the property yourself means stamp duty is only paid on the purchase price of the land and not the final value of the home built on the land.

Providing this is less than £250,000 and you are a first time buyer, this is nil.

The taxman is reportedly eying these solutions to pay less stamp duty and the corresponding  loss of revenue, but as yet, no action is in place to close the loophole.

British expats can easily invest in residential property through a new offshore pension scheme called a QNUPS.

The trust-like tax wrapper also does away with the problem of offshore pension funds being subject to UK inheritance tax rules.

Any expat with a QNUPS can now leave the balance of any pension fund remaining on their death to their family or loved ones without fear of a cash grab by the UK taxman regardless of residence and domicile.

But because the scheme does not have to report to HM Revenue and Customs unless assets are transferred from a registered UK scheme, like the other official UK offshore pension scheme called a QROPS, all the problems of holding residential property in a pension are removed.

The legislation lets UK expats or overseas nationals with UK pension rights invest in to a pension scheme at any age with no top limit.

Add to that benefits like no obligation to buy an annuity or alternatively secured pensions (ASP), no maximum contribution threshold and no requirement to have earned income from an employment.

A QNUPS also holds the flexible tax and investment benefits of other offshore pensions, like a QROPS (qualifying recognised offshore pension scheme).

Investments are available in more assets and markets.

Investments and cash drawdowns can be made in a number of major currencies to hedge against exchange rate fluctuations.

A QNUPS can also be established in a stable, low tax jurisdiction regardless of where the pension member lives.

A qualifying non-UK pension scheme was established in February by a new statutory instrument and is a perfectly legal trust structure for retirement and estate planning approved by UK law.

Buying residential investment property with a company is a financial disaster for most people.

Most accountants would advise against a property company holding ownership because of the tax disadvantages that stack up.

The main problem is capital gains tax.

At the moment, individuals pay capital gains tax at a generous 18%. Most tax advisers would expect this to go up after the election and certainly in the next budget.

The rate is out of kilter with other tax rates when  most people who can afford to invest in property are paying at least 40% income tax.

The current low rate allows tax saving opportunities that the next government will surely want to reverse

Companies do not pay capital gains tax but corporation tax on their sales of property.

The corporation tax rate is at least 28% and clearly a lot higher than an individual would pay when selling the same property personally.

That’s without taking in to account personal reliefs like PPR and lettings relief that protect profits earned on a house you have lived in and each owner’s personal annual capital gains tax exemption, currently £10,100.

Paying less capital gains tax is possible if a couple split ownership, where a company generally would have 100% ownership of a property.

Although investing in buy to let property with a company is not a great idea, property development or trading through a company is the opposite.

Most taxpayers would certainly benefit from buying and refurbishing property with a company so they can manage the amount of income they can draw from profits at lower rates of income tax.

The key is taking effective tax advice on how to pay less tax before buying a property rather than jumping in and completing the deal only to find out thousands of pounds could have been saved with some professional advice.

Need property tax advice? Try the Property Investment Expert tax and self assessment service

Holiday home owners with property overseas who struggling with financial problems can take some simple steps to ease their problems.

Hedging against currency fluctuation is a top priority – especially for bills in the Euro and US dollar.

As the Pound has taken a battering, UK-based owners of overseas holiday homes have found the costs of paying agents, maintenance and taxes has increased and that currency exchange rates and bank charges have considerably increased the amount they have to find each month.

Looking for a international financial exchange company outside banking is often a good move as the fees charged are significantly less than bank commissions.

Next step is making the property pay for itself by cashing in on holiday rentals.

Few properties make any decent cash because the only lets are below commercial rates to friends or family.

Find a holiday letting firm who will advertise and manage the property, leaving you the weeks you want to spend overseas while earning some money for the rest of the time.

Lastly, account for tax. You probably have to pay property taxes overseas that will vary from country to country.

You also have an obligation to report your rental income and expenses to HM Revenue and Customs.

Many holiday home owners let them out and believe that the money made does not have to be declared to the taxman if it is not brought in to the UK.

This is incorrect and amounts to tax evasion. The likelihood of being found out is high as most popular holiday home countries have tax information sharing and double taxation treaties with the UK.

Review your tax status to make sure ownership and financial record-keeping is optimised to meet your legal obligations.

Need help with overseas property tax – try the Property Investment Expert tax service

Property investors and buy to let landlords looking for a professional tax service offering expert advice and strategies to pay less tax should visit the Property Investment Expert self-assessment 2010 tax zone.

The Property Investment Expert tax service is overseen by best selling author Steve Sims, who wrote ‘Understanding and Paying Less Property Tax for Dummies”.

Online, the zone has an Filing Your Tax Return FAQ to help with deciding whether you need to file a return, deadlines and filing online.

A full set of 2010 self assessment tax return forms are also available as free downloads.

The property tax service will prepare rental accounts and tax returns while offering a tax review to ensure every property professional is reclaiming all available expenses and reliefs.

“The idea is to put all the tax information property investors and buy to let landlords need to complete their tax returns in one place,” said Steve Sims. “The section will be kept up to the minute with any changes from HMRC posted straight away.”

Property investors can sign up free news, legal and tax updates by email from Property Investment Expert. The site is one of the UK’s leading property investment news services.

Property Investment Expert will publish tax tips and a a guide to completing self assessment tax returns for property people soon.

Top rate taxpayers with property investments should consider offset mortgages rather than savings to beat the impact of the new 50% income tax rate.

Savings give a miserable return and no UK accounts offer the massive 7.4% return a super tax payer would need to hedge against tax and inflation.

These mortgages offset savings against mortgage debt.

Unlike a savings account interest is not earned on the balance of the savings pot, instead this pot is offset against the outstanding mortgage balance, with interest only accruing on the remaining balance.

This means the mortgage will be paid off earlier, and the interest paid on the mortgage will be significantly less with no tax payable.  The cash balance in the offset account can still be accessed at any time.

For example, customers taking out a £175,000 offset loan from Woolwich at 2.89% and holding £50,000 in a linked savings account, would only pay interest on the remaining £125,000, saving £13,372.09 in interest over the lifespan of the mortgage and knocking four years off the payment term.

To be to match this deal, savers in the 50% tax band would need to find a savings rate of at least 6.2%. This compares with the highest currently available savings account rate which is 5%.

Hannah Mercedes-Skenfield of moneysupermarket.com explained the strategy:  “Many people in the new 50% tax bracket will be looking at ways to limit the impact of both tax and inflation. As a result offset mortgages are an extremely attractive option for borrowers who also have a decent savings pot.

“It’s worth noting however that offset deals won’t necessarily be the right option for all prospective borrowers. The savings that consumers could realise will depend on the proportion of the mortgage debt they hold in savings and the rate they pay on their mortgage. Don’t forget to factor in any additional costs of remortgaging as these could be high depending on the offset mortgage you choose.”

Landlords and property investors often have difficulty in proving how much they earn and expenses claimed to HM Revenue and Customs. To help make those claims stick and pay less tax, here’s a list of financial records every property business should keep:

Details of all rental income, including all cash received.

-       Rental statements from letting agents

-       Rent books or other invoices to tenants

-       Bank or building society statements

-       Paying in books stamped by a bank or building society

Records of all purchases and expenses, including cash purchases.

-       Receipts

-       Bills and statements from suppliers

-       Bank, building society and credit card statements

-       Cheque book stubs

-       Business mileage log for each owner

-       Statements of account from professionals, like solicitors bills.

-       Mortgage interest statements from lenders

-       Hire purchase or other finance bills split to show interest paid and the amount of the finance amount repaid

-       Remortgage statements showing any costs and additional cash raised and what the cash was used for

Pay less tax with help from Property Investment Expert

Records of all capital costs should be kept separately

-       Costs of buying, like solicitors bills and stamp duty

-       Improvement costs, like building an extension, but not repairs and maintenance that are ordinary rental business expenses

-       Selling costs, like estate agents or auction fees

-       Deposits made by the owners to buy the property and details of where the money came from

Remember this is not an exhaustive list and any paperwork regarding income or expenses should be retained and included in the rental accounts for the appropriate year.

Keeping records on a spreadsheet or other software is fine, providing the entries are cross-referenced to the original document detailing the income or expense.