On the Money: End-of-year tax tips

The end of the financial year on Wednesday is a good time to think about capital gains tax and inheritance tax. That’s because you have allowances you can use every year to reduce the eventual bills you may get from both taxes.

For starters, every taxpayer has a capital gains tax annual exemption of £11,100, which means you can sell stuff — what financial experts call “assets” — at a profit and pay no tax on the gains you make up to that amount.

If you have sizeable assets such as a decent-sized share portfolio that has made a large gain, it’s worth using the allowance if you can to cut down a large tax bill later.

For older folk it may also be worth taking advantage of inheritance tax allowances to reduce the eventual bill on your estate. For instance, you can make a gift of up to £3000 a year without any inheritance tax implications or any number of small £250 gifts.

For these and other complicated financial affairs, it’s worth seeking the advice of a tax expert.