WHILST the first quarter of the year has not finished, we are fast approaching the end of the tax year and there seems to have been a lot to digest, and enjoy, writes Samantha Dolby. 

The troubles in Ukraine have significantly escalated, whereby the outcome remains uncertain. Mr Putin has been in power for 15 years, and despite the next Russian Presidential elections not being scheduled until 2018, he clearly has no desire to weaken his grip.

The Western response to the Crimean issue appears prudently muted, with sanctions taking focus.

In the past two weeks, investors have realised profits following the strong performance in 2013 and the euphoric optimism that prevailed in January. The impending vote over Scottish Independence, if successful, has the ability to affect the business community, as well as investors, and we remain cautious should this outcome prevail. The US indices reached all-time highs in February, and the FTSE 100 touched the peak reached in 1999 and remains on a rising trend.

Previous market highs commonly act as resistance levels, but the general feeling is positive towards both the UK and global economies. Whilst the maths is flawed if you factor in dividends, using a simple comparison, it is interesting to note that if the FTSE 100 had risen to the same degree as the Retail Price Index since 1999, it would stand at 10,454, a far cry from current levels.

The turbulent recovery story does not come as a surprise. As history repeats itself, they are usually prolonged affairs that do not occur in straight lines. The current political and economic issues will hopefully be temporary, but improving corporate earnings remain key to this.

Before the end of the tax year on April 5, it is just as important to make the most of your ‘use it or lose it’ ISA and Capital Gains Tax (CGT) allowances, as it is to chase the best rates of interest and portfolio returns. Also, make use of the higher annual pension contribution allowance this year, before it drops to £40,000 from April 6, and apply for Fixed Protection if you expect your pension fund to exceed the lifetime allowance when you retire. Realising losses to offset gains to keep you within the annual CGT allowance is the most simple, yet effective method to legitimately avoid a hefty Capital Gains Tax bill.

Furthermore, transfer assets to your partner if they pay a lower rate of income tax and make use of the £3,000 annual gift exemption for inheritance tax planning purposes. This doubles if you did not use last year’s allowance.

Looking forward, the budget is looming on March 19.

This is likely to generate headlines, with pensions a possible focus.

Fracking has again stolen the attention of many this week, this time focusing on the environmental affects. Areas of the UK have been opened up for energy exploration and George Osborne has already unveiled shale gas allowances, which will half the tax due on income from production.

The pathway is being created for a shale gas revolution, possibly mirroring that of the US, but it remains to be seen whether more advantageous action is taken in the Chancellor’s Budget next week.

For expert analysis and comment on this year’s Budget with Brewin Dolphin see the Northern Echo on Thursday March 20. On Twitter follow @Brewin_guy and @bizecho. 

Samantha.dolby@brewin.co.uk

Samantha Dolby is an Assistant Investment Manager at Brewin Dolphin and offers advice on a wide range of financial services to private clients, trusts, charities and pension funds.  

Past performance is not an indication of future performance. The value of any investment and any income can fall and you may get back less than you invested. No investment is suitable for all people and should you have any doubts you should consult an authorised financial adviser.