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has just 1,000. You would use up your full 7,000 ISA allowance and then transfer the remaining 3,000 to your partner for them to invest in ISAs held in their name. As long as you're comfortable with the principle of what's mine is yours', then this approach makes good economic sense.

Option 5: Utilise children's tax free options.
You can open a Child Trust Fund (CTF) which is effectively a tax shelter for children. Children born after the 31st of August 2002 can have a CTF. The government will make an initial contribution of 250 0r 500 (depending on the family's income status), and the parents can then contribute up to 1,200 per year until the child is 18. Not only does it reduce the amount of tax that you're paying but it will also help to safeguard your child's financial future. There are 3 different types of CTFs. You can either invest the money in a Savings CTF, or in a Stakeholder CTF, or a Shares CTF. The Savings options just pays regular savings interest, tax-free. The Stakeholder CTF invests the money in a range of shares. The Shares CTF allows you to invest the money in individual shares.

Option 6: If you've totally exhausted the other tax-free options, then you might like to consider Premium Bonds.
Premium bonds are a bit of a gamble and I certainly wouldn't advocate them as your main investment strategy. However, they are another option that you can use on top of the more conventional savings/investment options that I've already listed. Premium Bonds work as follows: you buy a set number of bonds (at 1 per bond) and they are then entered into monthly prize draws. You stand a chance of winning a prize if one of your bonds is drawn, and the prize could range from 50 up to 1,000,000. The minimum allowed investment is 100 and the maximum is 30,000. The downside is that you don't get any interest. The idea is that the amount of prize money paid out over time will make up for the lack of interest. Premium Bonds are offered by NS& I (National Savings & Investments) and their schemes are backed by the Government, and are therefore seen as low risk.

Hopefully, this article has helped to show that there are lots of options for minimising the amount of tax that you will need to pay on your savings and investments. If the above list of options seems a bit daunting, then you may wish to speak to a financial adviser. Bear in mind though that they may be tied to a particular company, in terms of what products they can recommend.

Learn more about this author, Simon Wright.
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