MARGARET CONNOLLY, head of tax at Kent accountancy firm, Reeves & Neylan, explains that tax treatment of property and property profits is not always as straightforward as the TV experts seem to suggest.

They encourage you to buy a house, do it up, take the profit and move on up the property ladder, implying this gain will be tax free as it is covered by Principal Private Residence Relief (PPR) – but be warned.

The authorities may take a different view if they can show a series of transactions was entered into for a profit motive, and may be able to subject your profits to income tax of up to 40 per cent.

Turning from the serial mover to the man who has occupied his property for many years and seen it surge in value, surely he is safe? Not necessarily.

Those fortunate enough to have large gardens could face a shock. If PPR is available it will apply to the house itself and to grounds extending to half a hectare. Relief for land in excess of this measure is by no means automatic.

PPR may be granted if the authorities accept that the additional land is needed for the ‘reasonable enjoyment’ of the property. This is not the same as saying that the owner would find it convenient to have the extra space, and the decision will often be based on what is considered normal for similar properties in the area.

If you sell a part of your garden to a developer and continue to live in the existing house, you are likely to be faced with a tax bill. By your actions you have proved that the whole garden was not required for the ‘reasonable enjoyment’ of the original property.

The same reasoning may also catch out those who downsize by selling their property along with most of its land, then build a more modest house on the land they retain.

Other ways in which the benefit of PPR may be endangered include renting out part or all of the property (although there are other specific reliefs), or using part of it to run a business.

If you work from home, ensure no part of the house is used exclusively for business purposes. It is tax efficient (if worrying) to allow the children to play on the computer in the home office, at least every so often.

If PPR presents risks, it also offers opportunities. Once a valid claim has been established, it holds good for the final 36 months of ownership of any property, irrespective of whether the owner is occupying it at this point.

With careful planning and professional advice, the gains on multiple properties can sometimes be extracted without making a sizeable contribution to the tax man.