Use your allowances

Your ISA allowance works on a ‘use it or lose it’ basis, so it’s worth using as much of the £20,000 (’19/20 tax year) allowance as you can each year. If you’ve got the cash, top up. If you don’t know where to invest, use one of the ‘cash park’ facilities offered by investment platforms and decide later.

The same goes for your pension allowance. There remains a perennial threat that pension tax relief will be cut – make the most of it while it’s still around. If you have unused allowances from previous years, you can use the carry forward rules in order to benefit from any unused allowance from the previous three tax years. However, this won’t happen automatically.

Check where your pension is invested

Workplace pension contributions are going up from 5% to 8% of your annual salary. That’s a lot of cash and should do a lot to improve your retirement. However, it is also worth checking whether it’s going into the right place. If you don’t make a choice, your pension will go into your firm’s ‘default’ scheme. Most are OK, but if you are young, you may want a fund that takes more investment risk, or less if you are older.

Give gifts

Getting into the habit of giving gifts is an easy way to take some cash out of the reach of inheritance tax. It may only be £3,000 per year, but that can mount up over time. You can also give regular gifts out of income. These can be as high as you like, providing you can show they don’t diminish your standard of living.

Spouse to spouse transfers

Both husband and wife have tax allowances – including the personal allowance, dividend allowance and capital gains tax allowance. Transferring assets between spouses is tax free, therefore it makes sense to transfer assets so that you both make use of your allowances.

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Check your will

It’s easy to shove your will in a drawer and never think about it again. However, it’s worth considering whether your circumstances have changed – are there new additions to the family, for example? Or have you fallen out with some of your beneficiaries? You may not need to do anything, but checking once a year is good practice.

Consider investing in a Venture Capital Trust (VCT)

These are super high risk, investing in very small companies. However, they do come with some attractive tax incentives attached and may be an option for those who have exhausted their pension and ISA allowances. There’s a 30% income tax rebate on contributions of up to £200,000 provided you hold the VCT for at least five years

Spend, spend, spend

Remember, for the older generation, if you’ve spent it, your heirs won’t be paying tax on it. At the same time, spending can be a good option if you’re self-employed – time to take out all those clients you haven’t seen for a while. You can usually deduct all costs incurred for the ‘sole purpose of earning business profits’ from business revenues.