Immediate tax priorities

Capital gains tax (CGT) planning should be considered by both those with gains in the year and those that do not have any gains. For those that have not realised gains, the annual exemption of £10,900 will be lost if it is not used. As an example, someone with investments may wish to consider portfolio adjustments to realise assets at a gain and ensure that the annual exemption is used. Those that have gains already in the year may wish to consider portfolio adjustments of assets to realise a loss to offset against the gains.

Alternatively, someone with a capital gain in the year (or indeed in the three prior years) or expecting a gain in the following year) could consider an enterprise investment scheme (EIS). In this way, they could benefit from both deferral of CGT on their gain and no CGT on the disposal of the investment if it is held for three years. They could also gain income tax relief at 30 per cent.

In addition, under EIS, the income tax relief on shares issued in the current tax year may be carried back to the previous year, so £2m can be invested pre-5 April 2014, with £1m relief (the maximum) for the current tax year and £1m carried back to the 2012/13 tax year.

However, where EIS is considered as a means of CGT deferral, there is a risk that CGT rates may increase in the future, therefore the ultimate tax payable may be at a higher rate. If the deferred gain would have been taxed at an effective rate of 10 per cent under entrepreneurs' relief, it must also be remembered that it will not gain the EIS relief when it is ultimately taxed. In this case, an individual should consider not making the claim for the deferral relief.

Meanwhile, under the government's current seed enterprise investment scheme (SEIS), gains that are reinvested into qualifying SEIS investments can get enhanced relief at 50 per cent on income tax and 50 per cent CGT exemption in the current tax year.

In addition, if a SEIS investment was not made last tax year, but an individual has sufficient income and gains in that year, an investment can still be made before 5 April 2014 then carried back to last year. The CGT exemption was 100 per cent in the last tax year and the maximum investment in each year is £100,000. Of course, there is a risk with EIS and SEIS, and every investment must be weighed up carefully.

Personal allowance

There are other income tax planning opportunities. Those earning between £100,000 and £118,800 in particular should review their tax position. In this bracket, the tax rate goes to an effective 60 per cent as the personal allowance is lost. For some individuals, it may be possible to change the timing of income (for example, deferring declaring a dividend in a privately owned company until after the tax year) to preserve the personal allowance.

Alternatively, if you are aware that your income in the next tax year may fall into the £100,000 to £118,800 bracket but won't this year, you may be able to bring income forward into the current tax year (remembering that this will mean the tax will be due one year earlier and will need to be financed). This may also apply if one is forecasting income of around the basic rate threshold or is likely to have a charge under the high income child benefit charge. Also consider gift aiding charitable donations, pension contributions and switching income between couples by gifting income producing assets.

It is important to note that with pension contributions, the limit on which tax relief can be obtained will reduce from £50,000 gross contributions to £40,000 after 6 April 2014, so individuals may wish to maximise contributions in this tax year. Any unused allowance for the last three tax years can also be carried forward and used in the current tax year.

Clearly, there are numerous ways of making the most of the available tax reliefs, with significant savings to be made. They do, however, require careful consideration, so those looking to use them before 5 April should act now.

Lucy Brennan is a partner at Saffery Champness

She writes a regular blog on tax and estate planning for Private Client Adviser