Opportunity knocks, but not for long

special report: year-end planning; Clifford German introduces a three-page guide to making the most of seasonal bargains

The approach of the end of the financial year is the equivalent of Christmas and New Year for suppliers of financial services. It is the traditional time of year when suppliers and buyers come closest together and buyers lose some of their traditional wariness when suppliers offer them unrepeatable bargains.

The right time to buy financial services, of course, is when they are needed, or when they are affordable and cheap. Insurance comes into the first category, mortgages are in category one, remortgages in category two, pensions probably have a foot in both camps, while investments are strictly second-category purchases.

A fixed-rate loan taken at a high interest rate when rates are set to fall, or a fixed-rate deposit placed at a low rate when rates are due to rise is quickly made to look hasty, and shares, unit trusts and even Personal Equity Plans bought when values are looking over-cooked are soon regretted.

Most tax advisers actually recommend that investment and especially tax planning moves should be made early in the year in order to get the maximum advantage of the earning power and the tax concessions that might be available, as well as to beat the rush.

But there is no denying that many investments depend for their appeal on tax rules drawn up by successive chancellors and applied to the financial year, which traditionally begins on 6 April and ends the following 5 April. And sometimes it is better to wait until the last minute to see exactly how different investments are shaping up and exactly how much money you can prudently afford to set aside.

This year it is also worth remembering that 5 April is Good Friday, so the tax year ends for investment purposes on 4 April. If you want to take advantage of the traditional seven-day cooling-off period you should really make any decision by 28 March.

The main tax rulings involve pensions, PEPs, and special tax shelters, ie venture capital trusts and enterprise investment schemes. But the year- end also has implications for inheritance tax planning, the calculation of taxable capital gains and the opportunities to shelter gains and postpone the day when any tax may have to be paid.

If you have not put the maximum you are allowed by law tax-free into a company pension plan or into additional voluntary contributions each year, you will have lost at least some of the opportunities.

The tax clock on Tessas starts on the day you open the account and ticks for five straight years, regardless of the intervening tax years. But if you have not bought your full allowance of pounds 6,000 invested in a Personal Equity Plan or corporate bond PEP, plus pounds 3,000 invested in a single-company PEP or bond PEP by the end of the tax year, the opportunity will, like Clementine, be gone and lost forever. If you have not invested the (up to) pounds 100,000 you can put into a venture capital trust or enterprise investment scheme you will have missed the boat, for the current year at least.

Capital gains are also liable for tax in the year in which they are taken. This year you can realise a capital gain of up to pounds 6,000 without any liability. From 6 April, this ceiling rises to pounds 6,300. So if you want to sell assets that will create taxable gain it makes sense to sell some of the asset this year and some next year to reduce or even eliminate the taxable gain in each year.

Likewise if you expect to realise future gains that will be over the limit, it makes sense to realise up to pounds 6,000 before 4 April and buy the asset back when markets reopen on 9 April. Unless prices have moved sharply you will have crystallised a gain that will be tax-exempt and reduced any subsequent gain on which to pay tax and it will only have cost you the commission charges on the transactions.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

News
US comedian Bill Mahr
people
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Sport
football
News
Rob Lowe
peopleRob Lowe hits out at Obama's snub of Benjamin Netanyahu
PROMOTED VIDEO
News
Davies (let) says: 'Everybody thought we were having an affair. It was never true!'
people'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Arts and Entertainment
Over their 20 years, the band has built a community of dedicated followers the world over
music
News
Staff assemble outside the old City Road offices in London
mediaThe stories, the writers and the changes over the last quarter of a century at Britain's youngest paper
Life and Style
The Oliver twins, Philip and Andrew, at work creating the 'Dizzy' arcade-adventure games in 1988
techDocumentary looks back at origins of the computer-games industry
Arts and Entertainment
Krall says: 'My hero player-singer is Elton John I used to listen to him as a child, every single record
music
News
Friends for life … some professionals think loneliness is more worrying than obesity
scienceSocial contact is good for our sense of wellbeing - but it's a myth that loneliness kills, say researchers
Arts and Entertainment
The Wu-Tang Clan will sell only one copy of their album Once Upon A Time In Shaolin
musicWu-Tang Clan and The Sexual Objects offer fans a chance to own only copies of their latest albums
News
i100
Environment
Number so freshwater mussels in Cumbria have plummeted from up to three million in the 20th century to 500,000
environment
Life and Style
Models – and musicians – on the catwalk in Dior Homme for the men’s 2015/16 fashion show in Paris
fashionAt this season's Paris shows, various labels played with the city boys' favourite
News
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Tax Assistant

    Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

    Recruitment Genius: Outbound Sales Executive - OTE £25,000

    £16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

    Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

    £45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

    Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

    £35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

    Day In a Page

    Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

    What the six wise men told Tony Blair

    Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
    25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

    25 years of The Independent on Sunday

    The stories, the writers and the changes over the last quarter of a century
    Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

    Homeless Veterans appeal

    As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
    Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

    Smash hit go under the hammer

    It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
    Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

    The geeks who rocked the world

    A new documentary looks back at origins of the computer-games industry
    Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

    Belle & Sebastian is taking a new direction

    Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
    America: Land of the free, home of the political dynasty

    America: Land of the free, home of the political dynasty

    These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
    A graphic history of US civil rights – in comic book form

    A graphic history of US civil rights – in comic book form

    A veteran of the Fifties campaigns is inspiring a new generation of activists
    Winston Churchill: the enigma of a British hero

    Winston Churchill: the enigma of a British hero

    A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
    Growing mussels: Precious freshwater shellfish are thriving in a unique green project

    Growing mussels

    Precious freshwater shellfish are thriving in a unique green project
    Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

    Diana Krall interview

    The jazz singer on being friends with Elton John, outer space and skiing in Dubai
    Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

    Pinstriped for action

    A glimpse of what the very rich man will be wearing this winter
    Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

    Russell T Davies & Ben Cook: How we met

    'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
    Bill Granger recipes: Our chef serves up his favourite Japanese dishes

    Bill Granger's Japanese recipes

    Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
    Michael Calvin: How we need more Eric Cantonas to knock some sense into us

    Michael Calvin's Last Word

    How we need more Eric Cantonas to knock some sense into us