The Co-operative Investments is urging UK adults to make some new tax year's resolutions and potentially save thousands of pounds.

Zack Hocking, head of investments at The Co-operative Investments, says, ‘The new tax year offers people an opportunity to take advantage of annual allowances and potentially make some significant savings.

‘The good news is that it's fairly simple to do. Just by making contributions to an ISA or a pension, people can take advantage of the tax breaks.’

Individual savings accounts (ISAs)
ISAs allow people to save in either stock market-based investments or a traditional savings account. Capital growth and interest earned on the savings within an ISA are free from tax.

Anyone aged 16 and above can invest up to £7,200. Investors can choose to place up to £3,600 into a traditional savings account, or put the whole amount into an equities scheme.

Pensions
Tax relief on pension contributions varies depending on the type of scheme.

With a personal pension, the provider claims back tax from the government at the basic rate of 20 per cent. It means that for every £80 placed into a pension, the government tops it up to £100. While those on the higher rate of tax can also claim back the difference between the basic rate of 20 per cent and the higher rate of 40 per cent, equating to 20 per cent in their tax return.

For company pension schemes, employers take pension contributions at source of pay before tax deductions are made. This means tax is only paid on the remainder. Higher rate taxpayers therefore get the full relief straight away, without having to claim it back from the government, unlike personal pensions.

Inheritance tax (IHT)
HMRC allows up to £3,000 per year to be given away from an estate.

Additionally, small gifts of up to £250 per year per individual can be made, while there is an option for parents and grandparents to make a ‘gift' when a child gets married without incurring an IHT liability (£5,000 and £2,500 respectively).

Capital gains tax
Capital gains tax is paid when someone makes a gain on an asset, selling it for more than they paid for it. There is an annual exemption of up to £10,100 for the 2009/10 tax year, and as assets can be held jointly by spouses or civil partners, this allowance can be doubled.

Child Trust Fund
Up to £1,200 per year can be contributed to a Child Trust Fund account.

The fund will build up free of tax on investment income and capital gains – just like an ISA – until the child reaches 18, when funds can be withdrawn.

Every child living in the UK and born after 31 August 2002 should receive a voucher from HMRC to open a Child Trust Fund.

Submit a claim for child tax credits
Anyone with children under 16 years of age can submit a claim for child tax credits, even if their family income is currently too high (normally over £58,000) to qualify. If their income suddenly falls then an existing claim can then be amended to receive tax credits from the start of the tax year.

Fresh claims are only back-dated for three months.

Interest on savings
Non-taxpayers should ensure they have registered to receive interest tax free on their bank savings. If tax has been getting deducted then a refund claim can be made.

Transfer of assets
Consider transferring ownership of assets to your spouse or civil partner to achieve a spread of income that will use all personal allowances and lower tax rates. If transferring assets between spouses, investments can be allocated to make full use of the basic rate tax (20 per cent) and the starting rate for savings tax (ten per cent) bands.

Maximise your age allowance
Anyone aged over 65 may qualify for an age-related allowance of £9,030 for 2008/09, while this could be £9,180 for those over 75. However, this extra age-related allowance is reduced by £1 for every £2 of total income exceeding £21,800, so it is worth considering spreading an income to make best use of this allowance. Tax deductions can also be claimed to reduce income, such as through gift aid or additional pension contributions (if under 75).

People should also be aware that gains from cashing in life assurance bonds are treated as additional income that could affect the age allowance. A tax saving may be made by cashing in a bond in tranches over two or more tax years.

Donate to charity using Gift Aid
A donation made to charity through Gift Aid will benefit from tax relief.

If you're a basic rate taxpayer, Gift Aid can turn a £1 donation from you into £1.28 for the charity. If you're a higher rate taxpayer, you can claim tax relief on your donation through your self-assessment tax return. You can nominate a charity to receive all or part of any tax repayment due to you and boost your donation even more.

Further reading:

Financial planning with ISAs
Take charge of your future
Effective IHT planning
UK wastes £10 billion in wasted tax payments
Diminishing interest rates leave savers confused