Q. I have a rental property that I bought for £60,000 without a mortgage. It's now worth £150,000 and i'd like to raise a mortgage against it for £100,000 to give to my son to help him get on the property ladder. What are the tax implications?

A. As the rental property originally cost you £60,000, you will be entitled to tax relief on the mortgage interest on £60,000 of the £100,000 borrowings. The gift to your son will count as a Potentially Exempt Transfer for Inheritance Tax and will only be liable to Inheritance Tax if you fail to live for a further 7 Years and at the time of your death your whole estate including the gift is above the IHT threshold at that time, which is presently £285,000.

Q. I run my own business as a self-employed electrician and am approaching 65. Do i still need to carry on paying national insurance?

A. In summary liability to national insurance will stop when you reach 65. Liability to the fixed weekly Class 2 contributions stops when you become 65. However, Class 4 contributions which are based on your level of profits are slightly different in that you need to be 65 before the start of the tax year for their to be no liability for that year.

Q. I've heard that there are some tax benefits of investing in woodlands. What are they?

A. Returns from forestry have been very good in recent years although it's often the tax breaks that really make the investment worthwhile...

• Income tax - there's no tax on profits you make but no tax relief for losses either.
• Capital Gains Tax - there's no tax on trees that are standing or felled but the land the trees are on is a chargeable asset.
• Inheritance Tax - woodlands managed on a commercial basis qualify for 100% Business Property Relief once they have been owned for 2 years so they are not liable to IHT at all at that stage.

Investment in forestry can be done simply by investing in a forestry fund.

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