This would mean that a prospective mortgage provider would check they were in permanent employment and allow them to get a mortgage slightly bigger than they would usually be allowed on their salaries.Either way, Ms Strike and her partner would need to find a deposit of around 10 per cent of the value of the house, which is £10,000.. I am a headteacher earning £37,000. I had a 10-year gap in my occupational pension which I am compensating for with additional voluntary contributions [AVCs]. My annual AVC contributions are £3,312 a year, which are tax-deductible.

As the pension proceeds must be used to purchase an annuity on retirement in 10 years I will not be able to access the capital sum. Might I be better off contributing the next 10 years’ £33,000 into an Isa or bond, giving me access to the capital?

Moneynetenergyprovidersearch Q:I am a headteacher earning £37,000. Hugh Roberts, of RJ Temple IFA, calculates on our behalf that your tax saving through the use of AVCs in that time is worth £13,248, making your net contribution just £19,872. While the proceeds of an Isa are tax-free, your contributions have no upfront tax relief, so your savings would reduce, or your investment would be lower.

“At retirement, the Isa fund could be switched into something like a corporate bond, to provide effectively tax-free income,” Mr Roberts says. “In contrast, the pension produced from the AVC would be taxable. The Isa fund would also remain available, whereas the AVC fund would be used up in buying the annuity. Today’s annuity rates are poor, but they may improve in the future if inflation and interest rates rise; or, of course, get even worse.”Q: My sister and I are selling our late father’s house for £25,000 more than the estimated value accepted for the grant of probate. Will we have to pay capital gains tax on the notional profit? DC, Stockport.A: Yes.

Stephen Pallister, a tax partner at lawyers Pinsent Curtis Biddle advises, though you may be able to mitigate the tax bill. If your father’s estate did not pay inheritance tax – the threshold in the last financial year was £242,000 – it may be worth trying to get a formal valuation showing the property was worth more This may reduce or eliminate any CGT now payable. Secondly, if you lived with your father before his death you could use the CGT exemption on main residence homes. Thirdly, if you are executors of the will you can set any of your own unused annual CGT exemption (£7,500 for 2001/02) against the gain The remaining gain will be taxed at a flat 34 per cent. Your CGT liability would also reduced by setting it against unused CGT exemptions if the executors pass the house out of the estate to you and your sister before the sale, or agree to sell it for you on that basis. “If you set your own unused CGT exemptions against the gain it would take out a maximum of £15,000 of the expected gain of £25,000,” Mr Pallister says. “You will each be taxed on half of the remaining gain, not at 34 per cent but at your top marginal rates, which will be based on the sum of your own income and gains in the tax year.