No-one wants to see the tax-man take an unduly large slice of their hard-earned money. It's important therefore that investors maximise the tax-free options that are available to them.

Tax regimes, in relation to savings and investments, differ from country to country. I live in the UK so this article focuses specifically on the tax-free options that are open to UK investors. However, it is likely that similar instruments will be available in other jurisdictions, so hopefully the options listed in this article will enable you to investigate similar options in your country.

Options for maximising your tax-free investments:

Option 1: Take out a pension
Everyone should have a pension and the beauty of pensions is that they are a tax efficient device. Basic rate taxpayers get 22% tax relief on pension contributions, so for every 78 that they invest, the government contributes 22, bring it to 100.

Option 2: Maximise your tax free basic savings allowance, via a Cash ISA.
ISA stands for Individual Savings Account. ISAs were introduced by the UK government in 1999, and provide a means for people to get a tax free return on their savings. Up to now, you've been able to invest up to 3,000 per tax year into a Cash ISA. However, from April 2008, this yearly limit is being increased to 3,600. Most financial advisers recommend that you keep some money back in instant access savings accounts, so it makes great sense to maximize your ISA allowance each year. (Note: You can only have one Cash ISA per year)

Option 3: Maximise your tax-free investment in shares, via a Shares ISA.
As well as being able to have a Cash ISA, you can also take out a Shares ISA. The total yearly amount that you can invest into ISAs is 7,000 per year. Therefore, if you've taken out a Cash ISA with a 3,000 limit, then you can invest an additional 4,000 into a Shares ISA. Or alternatively, if you don't have a Cash ISA, you can invest the full ISA 7,000 allowance into your shares ISA. A little bit complicated but definitely worth making the most of.

By utilizing the Cash and Shares ISA allowances, you can invest up to 7,000 per year without having to pay any tax on those investments. This should meet the needs of most investors. However, there are still some other options if you have more to invest.

Option 4: Maximise your partner's ISA allowance.
If you're married (or in a longstanding partnership), you could maximize your partner's ISA allowance. Imagine a scenario where you

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