You recently answered a question on inheritance tax for a non-domiciled couple. I have a close friend who will have the opposite situation. He owns a house in the UK and visits two or three times a year for short periods. He is a Hong Kong resident, he works for their government and will get a Hong Kong pension when he leaves. Have you any advice for him when he returns?

Leonie Kerswill, tax partner at PricewaterhouseCooper, says your friend sounds as if he is UK-domiciled because you talk about his “returning” to the UK. This implies he has retained a UK domicile even though it sounds like he has been out of the UK for some time. The fact that he has a house in the UK reinforces this situation.

Accordingly, in inheritance tax (IHT) terms all his worldwide assets will fall into the UK IHT net. Kerswill says that planning in this situation will therefore be similar to anyone else in the UK and will involve the need to assess the family position, what the individual’s desires are and the range of assets. All of which should lead into making a will and possibly starting to pass on some assets, if appropriate, during their lifetime.

She adds that other taxes might also need to be considered, in particular capital gains tax. There may be opportunities to dispose of assets before your friend returns to the UK while still non-resident for UK purposes (assuming he has been out for the five plus years necessary to establish CGT non-residence). Once he returns to the UK, he will be in the UK income tax net. He might have been paying income tax on his residual UK income (if he has any) whilst he has been outside of the country.

Kerswill says your friend will also need to check whether any tax is due in Hong Kong. Timing property disposals, for instance, can be quite tricky when someone leaves a country where they have been resident for many years to return “home”.

I bought a purpose-built flat in 1973 for £6,500 and lived there until 1993. I still own it and have never let it out. I bought my present house jointly with my partner in 1993 and this property has an outstanding mortgage of £10,000. I’m aware that a “second” property has a CGT liability. It is currently worth £150,000 and I am now looking to sell it. How would I work out how much CGT is payable? I am 75 and pay basic rate income tax. I also have some large losses on past share deals, which I understand can be offset against future gains?

Stephen Herring, tax partner at BDO Stoy Hayward, says your taxable capital gain will be a small proportion of the proceeds from the sale. You will benefit from certain tax reliefs such as the principal private residence (PPR) exemption, which exempts profits on an individual’s own home from capital gains tax. Herring says that only the period from April 1982 until the date you moved out in 1993 will count towards the PPR exemption because the allowable cost was rebased at the market value on 31 March 1982. Assuming the flat was your sole private residence during this time, the tax due on the capital gain for this period will be reduced.

Unless you made an election for your flat to continue to be treated as your main residence after 1993, the PPR exemption is unlikely to apply to the flat after that year. However, under current rules, the last three years of ownership do qualify for the exemption. In total, therefore, the PPR exemption should apply for approximately 14 out of 24 years you have owned the property, so only less than half of the gain – in this case around £87,500 before any other reliefs – will be taxable.

Herring says the actual taxable gain should be much smaller than this as the market value of the flat at March 1982 can be set against proceeds. You should also benefit from indexation relief – an allowance for inflation that existed until 1998. Professional fees in buying and selling the flat can also offset the gain, as can any taxable losses on previous share sales. Taper relief from April 1998 will then reduce the net gain by a further 35 per cent (40 per cent if the sale is after 5 April 2007).

Finally, you have a tax-free capital gains allowance of £8,800 in the current tax year. The remaining gain will be taxed at the basic rate of 20 per cent, with any surplus over your basic rate tax band being assessed at 40 per cent.

I have recently opened a standard child trust fund (CTF) with Selftrade and intend to contribute the monthly child benefit money into this account. Grandparents are also likely to contribute to the fund over time so it could reach a decent size by the time my daughter reaches 18. I am keen to allow her access to a portion of the money at 18 but would like to restrict access to the full amount to age 25 when she is likely to be a little more responsible with money. I have set up a small stakeholder pension for her as well, so please do not recommend this as an alternative.

I would like to receive the tax benefits inherent in a CTF if at all possible. Following the government’s changes to trusts at the last budget, what are my options, how much will it cost to set up and should I seek the services of an IFA or a solicitor?

Patrick Connolly, certified financial planner at JS&P Towry Law, says child trust funds are very tax efficient as there is no potential liability to either income or capital gains tax to the child or their parent. However, at age 18 the child has absolute discretion over what happens to the accumulated funds, and parents cannot restrict their access to this money.

The Government view is that education in schools will teach children to be responsible with their investments. Connolly says that alternative investments made in the child’s name may not provide the same tax advantages as a CTF, although the child may be able to use their own allowances to mitigate tax. These are also likely to allow the child access to the funds at 18.

An alternative is to keep (non-CTF) investments in a parent’s or grandparent’s name with a view to gifting to the child at a future time. However, with this approach the adult may be liable to tax charges.