As the end of the financial year fast approaches, now is the perfect time to take stock of personal financial affairs.

It is an ideal opportunity to look at how your finances have performed over the past year and look at different ways to make the most of your money over the next 12 months and beyond. Key areas to focus on are capital gains tax allowances, ISAs and pensions.

Capital gains tax is an essential subject to consider, especially making the most of all the allowances that are available over the coming year.

Anyone who owns shares or investments which are subject to capital gains tax and are set for gains of up to £8,800 per investment could consider selling investments to make the most of their tax free allowance.

Should people want to keep hold of their investments, there are several options available. They could consider buying them back in 30 days time, buy them back in an ISA (which has a £7,000 limit) or consider a spouse buying the same investment.

Gordon Brown recently announced that ISAs will be continuing so they will remain a tax-free option to investors, especially to higher rate tax payers.

Anyone wishing to hold cash in an ISA, should take it out straight after 6 April 2007 to ensure that more interest will be sheltered from the tax man.

There are also a full range of funds that can be held in an ISA, including cash, property, corporate bond funds and equities – basically, there should be something to suit everyone.

Prior to April 5 is also a good time to look at pension contributions for the tax year as allowances, generally, are the largest they have ever been, in as much as an individual can contribute up to 100% of their earnings, subject to a cap of £215,000.

So if you have not done anything and would like to reduce your tax bill – then now is the time to act.

Also, if you are eligible for a bonus, Moore and Smalley LLP’s financial planning team, in conjunction with Danbro Accountants, may be able to make the benefit more tax efficient via pension contributions.

It’s also a good time of year to look at reviewing the tax position of you and your spouse and move cash and investments to where they will suffer the least tax in 2007/8.

For example, higher rate tax payers with a non-tax paying spouse should certainly move any cash deposits into the non-tax paying spouse’s name.

Also, husbands with gains on investments, for example £16,000, would suffer from capital gains tax because it is above the £8,800 limit. However, they could put half of the investment under their wife’s name and make the most of her allowances as well.

As always, investments can go down as well as up and people might not get back as much money as they invested. But any investment should be made taking a long-term view. 2006 was a reasonable year for investments with some very good returns being made in certain areas.

There are some concerns over whether interest rates will be increased in America and also in the UK, and that the Stock Market may also pause for breath after a very good six months.

But as I always stress, don’t put all you eggs in one basket – it is essential to keep a sensible balance with your investments and spread your risk.

In essence, the worst thing to do is sit down in April when it’s too late and realise that you could have acted in March and saved yourself significant sums of money.

By getting creative financial planning advice now could pay huge dividends for you and your family for many years to come.

Dave Gleeson is a qualified independent financial adviser with Moore and Smalley LLP with 20 years experience in the financial services industry. He can be contacted at deg@mooreandsmalley.co.uk or on 01772 821021.

Moore and Smalley LLP is authorised and regulated by the Financial Services Authority. Moore and Smalley LLP registered office is Richard House, Winckley Square, Preston PR1 3HP.