Year End Tax Review 2007 Contents A word to the wise Employee pensions A matter of trust Pension policies Family tax planning Mr and Mrs Inheritance tax Employee cars and fuel Borrowings and tax Tax-free perks Two jobs = too much NIC? Give generously and save tax Children's savings? Company or trade? Capital gains Business tax Investment limits Should VAT be flat?

Capital gains Up to 1998, it was common to "bed and breakfast" shares just before the end of the tax year, in order to take advantage of the annual tax-free allowance for CGT.This particular plan - selling a shareholding and buying back exactly the same thing the next day - no longer works, but it is still possible to achieve the same result (at the cost of more stockbroker's commission) by switching to a different investment. On a substantial portfolio and over a period of years, this can save a great deal of tax. The "taper relief" which was introduced to replace the old inflation allowance goes up for those assets which have been held since before 1998 on 6 April each year. If you are thinking of realising some investments, it may be best to wait until then - and you'll pay any tax a whole year later, as well. Taper relief is much more generous for "business assets" than it is for "investments".You can wipe out 75% of the gain after only two years and pay CGT at an effective rate of only 10%.The trouble is that the rules are complicated and you may not qualify for that magic 10% - the most important thing is to understand what your assets count as, and how much relief you are likely to get. It's better to take advice on this early, rather than to be disappointed by a lower level of relief than you expect after you have sold something. Action Point! Have you used your 2006/07 allowance? Do you have property which might qualify for business taper?