There's no need to cross the threshold

Married couples can greatly reduce their tax bill by transferring assets

The approaching end of the tax year is the traditional time to fine-tune your finances as far as possible, to minimise tax liability. Married couples should consider whether one partner is paying tax at the top rate on investments, while the other is well short of the top-rate threshold or, in extreme cases, is not paying tax at all. A simple transfer of assets from one to the other can significantly reduce the total tax bill the couple is paying.

This is especially important for non-working wives, who have no earned income to worry about, and for pensioners who are entitled to increased tax-free allowances. Many older people are still unaware of the fact that if their individual income is below the tax threshold, they can apply to a bank or building society to have their interest paid gross in future and avoid the need to reclaim tax on their future income or suffer tax which they need not pay.

Transfers between spouses are tax-exempt and married couples can reduce their potential liabilities to CGT by transferring assets between them now.

The new financial year brings a welcome reduction in the rate of tax levied on interest income from 25 per cent to 20 per cent, although the benefit is immediately reduced by the drop in the basic rate of tax from 25 per cent to 24 per cent, and top rate taxpayers gain nothing from the changes because their liability remains at 40 per cent.

This coming financial year brings a special frisson of its own, however. Self-assessment does not begin until April 1997, when the first self-assessment returns and instructions will be issued. But it will cover the details of your income and gains for the year, which is just about to start, so anyone whose tax affairs are the slightest bit complicated should make a resolution to keep good records, especially of untaxed income such as freelance payments and of expenditure that you hope to set against such income. It will be useful even if you hire a good accountant and vital if you intend to do it all yourself.