Top ten: How you can make sure more of your cash stays where it belongs ... in your own pocket

EACH week The Scotsman gives you a top ten guide to financial issues. Low savings rates and the effects of the recession mean it's crucial to take advantage of any tax breaks available, yet millions fail to do so.

Stephen Hall, an IFA in the private client and financial services department at HBJ Gateley Wareing, shares his top tips on paying less tax in 2010.

1 USE YOUR ISA ALLOWANCE Anyone over 18 wishing to save money should consider an individual savings account (Isa). Over 50s can save up to 10,200 each tax year and this amount will become the new maximum for under 50s from 6 April rising from 7,200).

Up to half of the allowance can be deposited in cash. Isas offer savers tax free interest on deposits and virtually tax free growth on stocks and shares. Any income they produce is also tax free, which can be especially attractive to higher rate taxpayers.

2 PENSION CONTRIBUTIONS These receive tax relief at your highest marginal rate of tax. Contributions are paid net of basic rate tax (even for non taxpayers), with the pension provider reclaiming the 20 per cent tax relief and adding it to your pot. Higher rate taxpayers reclaim an additional 20 per cent through Self Assessment.

Up to 3,600 a year can be invested in a stakeholder pension by a grandparent for a grandchild for a net cost of 2,880.

3 CLAIM TAX CREDITS Nine out of ten families with children are entitled to claim tax credits but many fail to do so and are missing out on money that they are entitled to. Finding out if you qualify is an easy matter of checking on line at the HM Revenue & Customers tax credits website – http://taxcredits.hmrc.gov.uk/HomeNew.aspx – or by contacting your local Jobcentre Plus office.

4 SHARE YOUR ALLOWANCES Being married or in a civil partnership allows you to transfer assets to your partner without triggering a potential tax charge. Transferring income producing assets to a non or lower earning partner makes tax sense and can generate significant amounts of money. Personal allowances are available to all and should be fully utilised.

5 SALARY SACRIFICE Many companies allow employees to give up some of their salary in exchange for another benefit, such as childcare vouchers or enhanced employer pension contributions. Salary sacrifice requires a formal change to your employment contract. You will pay less income tax and national insurance (NI) as your earnings are lower. Your company will also make a NI saving.

The savings can be substantial: a higher rate taxpayer taking the maximum monthly Childcare Voucher of 243 will save around 100 in tax. From 2011, only basic rate relief will be available for new entrants, although people currently receiving vouchers will be unaffected.

However, reducing your salary can impact on your ability to borrow money and can affect social security benefits such as tax credits.

6 TAX-EFFICIENT INVESTING Venture capital trusts (VCT) and enterprise investment schemes (EIS) are government backed initiatives aimed at attracting investment into typically small, higher-risk companies, aimed primarily at sophisticated investors or high earners. You can invest up to 500,000 into an EIS for a minimum of three years, receive 20 per cent income tax relief and your investment becomes exempt from inheritance tax after two years.

VCTs offer 30 per cent income tax relief on investments up to 200,000 and must be held for five years. Dividends and future gains are free of income and capital gains taxation for both.

7 INSURANCE BONDS These lump sum investments allow you to withdraw up to 5 per cent of your initial investment annually as income for up to 20 years without an immediate tax liability. Non and basic rate taxpayers will have no further liability, however there may be a liability for a higher rate taxpayer.

8 IHT PLANNING If you have a potential liability and can afford it, you should establish a regular pattern of gifting and make use of your annual gifting allowance, currently 3,000. If your gifts do not impact your standard of life you might be able to gift more on a regular basis. By using a trust, it is possible to gift capital but to retain a right to income it produces.

9 CHILD TRUST FUNDS These are tax-free savings for children born after 31 August 2002. The government kicks off the account with a payment of 250 and parents, family and friends can contribute up to 1,200 a year. The child has access to the fund at age 18.

10 MAKE A GIFT TO CHARITY Gift aid increases the value of gifts made by UK taxpayers as the charity can reclaim the basic rate tax on your donation. Higher rate taxpayers can reclaim a further 20 per cent relief themselves through Self Assessment.