§ The Finance Bill will contain provisions to implement two particular 1377 undertakings in the Government's election manifesto. The first relates to the case where both husband and wife are earning. It is, as we said, a nonsense, and a substantial disincentive, that above a certain level of earnings a married couple can pay more tax than two single people with the same earnings.
§ I propose therefore that husband and wife should be able to elect to have their earnings charged to tax as if they belonged to separate individuals, but on condition that the husband receives the single personal allowance instead of the married allowance. For administrative reasons this new provision cannot come into effect until the tax year 1972–73. The full year cost is estimated to be about £12 million.
§ I also propose to repeal, again with effect from the tax year 1972–73, the previous Government's legislation under which the investment income of young children generally is taxed as if it were the income of their parents. I am convinced that that legislation was misconceived. I propose at the same time to reduce to 18 the age at which a child's income derived from its parents ceases to be treated as the parents' income. This follows the recommendation of the Latey Committee on the Age of Majority.