Focus on year end planning

Now the New Year festivities are over, it is time to consider your year end tax planning. The spring Budget is likely to be less of an obstacle than usual, because last November's Pre-Budget Report (PBR) was more like a Budget in its own right. Your 2008/09 checklist should include:

Pension contributions
If you make a pension contribution before 6 April (a Monday in 2009), any tax relief you receive will be based on your income in the current tax year. If your income next tax year is going to be the same or lower than in this year, you could be in a position where you would receive 40% tax relief on a pension contribution made now, but only 20% in 2009/10.

Contracting out
Now is the time to review whether to become a member of the state second pension scheme (S2P) if you currently opt out (technically 'contract out') using a personal pension.
The national insurance contribution rebates set for contracting out are far from generous and capped at the age of just 43. Regardless of your age, it is important to take individual advice based on your own particular situation.

Inheritance tax (IHT)
You should aim to use all of your annual inheritance tax exemptions, of which the £3,000 annual exemption is generally the most useful. Your 2008/09 exemption can be carried forward only to the next tax year (2009/10) and then can only be used after the 2009/10 exemption has been fully used. Again, make sure you seek individual advice.

Individual Savings Accounts (ISAs)

The maximum you can invest in an ISA each tax year is now £7,200, of which no more than £3,600 may be in a cash ISA. Your ISA allowance cannot be carried forward, so if you do not use it, you lose it.

The Financial Services Authority does not regulate taxation and trust advice.