ANSWER: Whether or not you are liable to tax will depend on a number of factors, namely how much you have made from the gain, your own tax position and how you bought the properties in the first instance.

In recent years, and even months, there has been considerable interest in the buy- to-let market as property prices around Northern Ireland continue to soar.

More and more, people are looking into the possibility of buying and letting domestic property as a means of securing a positive financial future for themselves and their families.

The potential increases in the home market may make, over time, an attractive investment for individuals. The current rental yields from property, whilst low compared to the rest of the United Kingdom, provide the necessary cash flow to cover the cost of borrowings. However, the real uplift has come from the growth in the underlying property value.

The tax implications of the buy-to-let market are often overlooked and, as is the case with some investments, the tax position is not entirely straightforward. But, as with all taxes, careful tax planning can maximise the return on the investment.

If we look for now at the consequences of selling the property, the tax attributable on sale is capital gains tax (CGT).

CGT is payable if an individual (or it can be a company or charity) disposes of an asset or receives money in respect of an asset. The tax is only payable if you have made a gain on disposal, ie, if you have sold it for more than the cost of acquiring it.

The CGT amount chargeable is calculated after taking into account any indexation allowance, allowable costs and your annual exemption (which in this current year is £9,200).

Annual exemptions apply to each person, therefore a husband and wife have a combined allowance of £18,400 before any tax is payable.

The amount of tax payable will depend on the level of your income liable to income tax.

The amount chargeable to CGT is added to your income liable to tax and is treated as the top part of that total.

So the tax planning which takes place before or after the property has been purchased can reduce the tax liabilities that arise on the net rental income and the sale at a profit.

For instance, it should be possible for a husband and a wife to purchase the property in unequal proportions and still achieve an equal split of the income for tax purposes. This has the effect of saving tax in the situation that one partner has a lower tax rate than the other.

Any redistribution of ownership between husband and wife is not subject to CGT, so it may be that prior to making a sale the ownership of the property should be examined.

Alternatively, the property could be purchased by the partner with the lowest tax rate or perhaps no tax liability at all.

If both parties pay tax at the top rate, or indeed the gain pushes you into that top tax band, then this could be offset by a pension contribution, thus minimising the liability.

In summary, good professional advice is, as always, essential to reduce the tax costs of any investment, be it a property or any other place that your money has been invested.

Advice should always be sought at the time of making the investment, throughout the period you hold it, and also at the point of disposal. This will ensure that you retain as much of the gain as possible - and not pay any unnecessary tax.

Raymond Mulligan is managing director of Johnston Campbell, a company of independent financial advisers regulated by the Financial Services Authority.