A last chance to take advantage of tax opportunities

YOU have just over a day left to capitalise on possible tax breaks before the financial year ends on April 5. Act now or lose money, warn accountants.

"Although a lot of investors will be aware of their ISA allowances, there are several additional steps which can be taken to minimise this year's tax bill," said Rowena Marsh, tax partner with Grant Thornton, Poole.

She recommends the following measures to minimise your tax bill:

Saving income tax

Each member of the family, even a minor, is treated as a separate taxpayer and has his or her own personal allowances and exemptions.

Spreading assets and income around the family can therefore reduce the overall tax bill.

ISAs

Since unused contribution allowances cannot be carried forward, it is important to use your full allowance before April 5.

Consider tax-efficient investments

National Savings Certificates offer tax-free saving. You can invest up to £15,000 in each issue without it affecting any other tax-free investments.

Check your tax code

Most people have a tax code issued in February which applies to the new tax year. Check that your full allowances and any restrictions for taxable benefits are accurate.

Personal pension Plans (PPP)

Any individual under the age of 75 who is not a member of an occupational pension scheme can make contributions of up to £3,600 into a PPP and receive basic rate tax relief, regardless of their earnings or income.

Individuals can contribute more than £3,600 based upon their pensionable earnings and age, subject to the earnings cap of £102,000 in 2004/05.

Inheritance tax planning

An up-to-date will is the cornerstone of any effective inheritance tax planning: "We strongly recommend that you, your spouse and any other members of your family who own assets, make a will.

"Wills should be reviewed regularly, particularly where your circumstances have changed after your will was last drafted, as certain changes can invalidate the will."

Discretionary trusts in wills

If each spouse owns assets separately, they can bequeath them to third parties - rather than to the other spouse - to make use of their own nil rate band.

A common way to do this is by bequeathing assets to a discretionary trust.

This is a very flexible type of trust, where the trustees own the property on behalf of the beneficiaries.