How to avoid inheritance tax, capital gains tax & income tax? We all struggle with understanding how best to maximise our earnings and avoid tax where possible. Everyone I know prefers paying less taxes than more taxes. Most people also do not particularly enjoy talking about or studying how the intricacies of tax works.

"Oliver Wendell Holmes once said: 'I like to pay taxes. With them I buy civilisation. '"Mind you, I too am not against paying tax. Paying tax is good. They are the dues we pay to enjoy the benefits that government provides for our society like good roads, health care and the ambulance that rushes to our communities aid.

In my work, even amongst the financially savvy sectors, I find clients especially do not understand how capital gains tax works. It is actually quite simple and easy to avoid paying some tax - legitimately of course. Smart tax avoidance is essential to great financial planning. Capital gains tax is the most underutilised tax and for higher rate tax payers, it is the cheapest tax rate to pay too. I find a lot of income tax payers have goals of creating assets such as illiquid rental properties on which they have to pay more income tax; with your tax hat on, it would make more sense to pay capital gains tax at 18% or 28% rather than income tax at 40%; quite an upside.

How to avoid inheritance tax is a question on a lot of minds. Understandably so, with house prices continuing to rise strongly, a lot of wealth in property has been created making inheritance tax certain as death. However, there are simple steps that can be taken to reduce it: allowances each year that can be utilised, trusts that can be set up and other solutions that can minimise the tax payable. The inheritance tax threshold is £325,000 in 2014/15 but was only £100 in 1914 rising up to £15,000 in 1972!  With an average London house now worth over £500,000 you can see why a £325,000 threshold is alarming though.

How to avoid income tax? Well, there are important things to note such as using your ISA allowances, contribution to a pension, avoiding creating income (such as rental income) if you are higher rate tax payer, etc.

One of the benefits of working regularly with a financial adviser is a more practical understanding of tax. Understanding how it affects your financial planning goals and implementing solutions to make life more prosperous for the future.