MONEY TALK: A personal manifesto for tax

Last week's big idea from the Conservatives - what the politically incorrect might call a housewives' allowance - would benefit many married couples where the wife does not go back to work after having children. The carrot, also on offer to spouses caring for relatives instead of working, would be worth up to pounds 930 a year in tax savings. The idea is that carers would be able to transfer their unused tax-free personal allowance to a working partner.

On one level the manifesto proposal looks like an incentive for one partner to give up work; on another, an incentive for couples to get married - since transferring would only be permissible among conjugals.

The proposal should also serve as a reminder that many savers and investors can already make use of a non-working partner's allowance. And in some cases, those with serious investments, the income tax saving could be worth more than pounds 1,600, nearly double that under the new proposal.

The trick is to transfer taxable savings and investments into your partner's name. Instead of you paying tax on the interest and dividends at your highest rate, he or she can take the returns tax-free. This tax year non- workers can use their personal allowance to take up to pounds 4,045 of savings free of income tax.

Even partners who both work can benefit by putting savings in the name of whoever pays the lower rate of tax. And this wheeze is available to the unmarried too.

If the new proposal did come in - and John Major said last week that he would look to enact it in 1998 - then all but the richest married couples with a single earner would stand to gain by switching allowances rather than savings, assuming they met the "caring" criteria.

Transferring allowances might also be preferable to transferring investments for another reason; accountants say many people are loath to transfer assets to partners for fear of losing their money.

For a transfer to get favourable tax treatment, it cannot have any strings attached - the recipient in effect gains full control over the assets. Joint ownership is one way to avoid making this leap of faith in a partner, but at the same time allows half the tax saving.

Of course, the allowance transfer option might not be adopted by a Labour government. In which case, given that tax could rise in some shape or form, the asset transfer option is worth remembering.

MILLIONS will be quaking in their boots at the prospect of filling in a tax return under the new self-assessment system, or so armies of accountants would have us believe. Don't panic is my advice. If you do receive one of the new-style returns, or are due to, you still have until at least the end of September to fill it in.

Most people should not need the help of the financial advisers now hawking their wares. These pages will aim to tell you in the coming weeks what you need to know, and will remind you again later in the summer.