At this time of year, tax planning often takes precedence over outright investment ideas.

With the April 5 deadline approaching rapidly, scope for manoeuvre around the existing tax allowances is running out.

These matters are increasingly important after last week's Budget. By knowing what the tax allowances will be in 2006/2007, last-minute planning for 2005/2006 is made easier.

Very few people enjoy paying tax and, if perfectly legal moves exist to avoid paying it, then these methods are taken up.

Overall, the Budget was a disappointment for savers. Despite the savings ratio having halved in the past ten years, there were no incentives to correct this. ISA (Individual Savings Account) allowances have again been frozen at ££7,000. A forlorn hope was that Government stamp duty on share purchases could have been abolished, but to no avail.

This is effectively a £2bn-a-year tax on investors, big and small. The UK is disadvantaged as a place in which to do business because of this increased cost. Other European countries with major financial centres have either abolished or dramatically reduced their equivalent tax. The UK is one of only three EU member states (Ireland and Belgium being the others) that penalise the private investor by taxing small share purchases.

The capital gains threshold, on which gains above the allowance are liable to capital gains tax, increases from £8,500 this year to a much-predicted £8,800.

For a trust, the allowance increases from £4,250 to £4,400. This move is in line with inflation.

It would be nice to see capital gains tax (CGT) abolished, but with the tax revenue estimated to be about £2.5bn, that is unlikely. The last major change to the CGT regime was made in 1998, with the introduction of taper relief. This is now a welcome aspect of tax planning, as long-held investments can claim up to 35 per cent gains relief in 2006/2007.

Inheritance Tax is becoming more and more of a thorny issue. Wealth built up is generally income that has been taxed at least once. To tax those savings again on death is very unpopular.

Although it is claimed that 94 per cent of estates pay no tax, it is important to put this into context. With most estates for married couples passing to the surviving spouse tax-free, the liability to inheritance tax is also passed on.

The threshold increase of £275,000 in 2005/2006 to £285,000 in 2006/2007 sounds much less than the increase to £325,000 over the next four years. The bulk of many estates consist of the family home. Nearly a third of Britons who anticipate an inheritance are relying on it to fund their retirement after the collapse in pensions expectations.

The majority of the population favours a more equitable system, with the inheritance tax threshold index-linked to house prices.

Property prices have risen by 160 per cent since 1997, but the inheritance tax threshold has not kept pace. If the Government had increased the threshold in line with house price increases since 1997, it would now be about £500,000.

* For investment advice contact Anthony Platts on 01642 608855.