IT may seem like we have a lot of time until the end of this financial year, but now is a good time to make some significant savings to your tax planning before new changes come into force in April 2011.

ISA contributions

Get the most from your ISA contributions before the tax year ends. An ISA is still the main method of investing your hard earned savings and anyone from the age of 16 can pay a maximum amount of £5,100 into a cash ISA within a tax year.

Over 18s can also invest in an equity ISA, where funds are invested into stocks and shares. The full amount you can contribute into an equity ISA is £10,200, or you could choose to split this allowance, putting up to £5,100 into a cash ISA and £5,100 into an equity ISA.

Any growth in investment resulting from an ISA is tax-free, so anyone with funds to invest who has not already invested the maximum amount should consider doing so whilst there is time left, as leftover funds cannot be carried forward into the next tax year.

Transferring assets

Tax planning is especially important for higher earners, so couples should take action now and split their assets. If one partner in a marriage or civil partnership is a higher rate taxpayer, they should transfer any bank or building society accounts into the account of the lower income earner. One partner may be a non-taxpayer, and if that is the case, you must complete an R85 form to make sure all interest is paid gross. There are several other tax planning methods where personal allowances can be protected, so get advice from an Independent Financial Adviser.

Pension contributions

Anyone, including retired people and children, can pay up to £3,600 gross into a personal/stakeholder pension, which only costs £2,880 net, as investors are eligible to receive 20% tax relief. Financially secure grandparents may be able to make a great investment in their grandchildren’s future through stakeholder pensions. HMRC is giving you £720 for free, so make the most of this.

Capital gains tax allowance

Use up your capital gains tax annual exemption for this tax year, as this cannot be carried forward. The exemption is £10,100 per individual for 2010/11, but this must be utilised before the end of the tax year. This means a couple can shelter gains of up to £20,200, tax-free between them.

Consider the timing of the sale of your assets to make full use of your annual exemption.

Children’s investments

Children, like adults, have a personal allowance of £6,475 for the tax year 2010-11, which is tax-free income. As long as their annual income (including interest) is below this, they'll be able to receive interest without having tax deducted. Parents or guardians must fill in a R85 form for each account.

You can give a child as much money as you like, but if it earns more than £100 interest a year, the interest will be taxed as if it were your own. However, this only applies to parents and step-parents. Grandparents and other adults who give money to children are not liable to pay tax .

Inheritance tax exemptions

Make use of your inheritance tax gifts. You can gift up to £3,000 a year and this can be backdated to the previous year.

Gift Aid

When you donate to charity, make sure you Gift Aid your contributions so the charity can claim an extra 20% back from HMRC. If you’re a higher rate taxpayer, you too can benefit from the tax relief as you can claim back the difference between the higher rate of tax and the basic rate of tax on the total value of your gross donation.

:: Alok Dhanda runs Dhanda Financial, 52 Dean Street, Newcastle, NE1 1PG. Tel 0191 255 8960, alok@dhandafinancial.com or visit www.dhandafinancial.com