'Pounds 5bn wasted' by taxpayers

THERE are a number of ways in which people can make the most of their tax allowances before the end of the financial year.

IFA Promotion, the agency that promotes the benefits of independent financial advice, is offering a free 16-page 'Money Detector' booklet to help people save money by making the most of their allowances.

IFA Promotion estimates that the public wastes more than pounds 5bn each year by paying too much tax. It says that the waste is caused by inertia, poor tax planning and through not taking professional advice. It claims that the price of missed opportunities among husbands and wives who do not opt for independent taxation could be as high pounds 1.4bn.

Other areas of tax wastage are inheritance tax - gifts of up to pounds 3,000 a year can be made tax free - and capital gains tax - pounds 5,800 of gains are exempt.

The end of the tax year could be the time for married couples to consider the benefits of independent taxation.

A 24-page booklet containing details on how married couples can streamline their affairs so they make the most of their tax allowances is available from The David Aaron Partnership, the independent financial advisers.

The booklet shows how to make maximum use of income tax, capital gains tax and inheritance tax allowances. It gives detailed case histories.

Another way in which people can make the most of their allowances is to put as much as possible into a personal pension.

Personal Pension Management, a subsidiary of Provident Life, emphasises the advantages of using a pension to shelter the maximum amount of tax.

It says that one benefit of using a self-invested personal pension (SIPP) to soak up tax allowances - as opposed, say, to using a personal equity plan or another type of personal pension - is that the money can be held in cash. This way, it will still attract tax relief until the policyholder is ready to invest.

IFA Promotion is on 0483 461461. 'The Independent Taxation of Married Couples - A Simple Guide' is available from The David Aaron Partnership, Shelton House, High Street, Woburn Sands, Milton Keynes MK17 8SD. The guide, normally priced at pounds 5, is pounds 4 until 5 April.