Tax is a key component of any financial planning. No one wants to pay more tax than they have to. Investment performance can also be enhanced by reducing your tax liability through the use of tax-efficient wrappers or reduced through tax inefficient structures.

Nevertheless, you should not necessarily allow the tax tail to wag the investment dog. This means your investment decisions should not be driven solely by the potential tax savings that can be achieved. As we will see in this chapter, some of the most attractive investments from a tax perspective carry the highest potential investment risk.

This chapter will outline some of the tax-efficient wrappers and investments you might want to consider. It is important to take advice in this area, however. This is because tax planning can be very complex and the rules can change frequently. The degree of sophistication of tax planning varies, from Individual Savings Accounts (ISAs) and pensions through to trusts and business property relief.