As an articled clerk, a client asked me for financial advice following a spring Budget.

Discretion directed me to my principal for guidance.

He said: 'We only advise on the law as it is, not as it may be.

Tell him to go away and come bank in the autumn when we shall have a Finance Act.' I did and he did.Those days of deference are dead, and yet the directions I was given were sound enough.

The advice we not give, on demand and in speculation, on the days after Budget Day, is wisely backed up in writing by a caveat that the Finance Act is still to come.

The adviser needs to keep a beady eye on the progress of the Finance Bill.

This summer's Budget puts the adviser in more difficulty than usual because it is full of promises.

Promises to review, eg taxation of charities.

Promises to develop plans for new Individual Savings Accounts.

Promises to sharpen the focus of, for example, venture capital trusts.

Analysis of the Budget proposals, offered as esoteric comment, is not in short supply.

But solicitors will want to give their private clients as much practical guidance as possibleTax creditsA main focus of the Budget is the immediate abolition of tax credits on the dividends paid by UK companies for pension providers and corporate shareholders, and the promise of abolition from April 1999 for non-taxpayers and PEP holders.

From the same date, tax credits will be halved to 10% for tax-paying shareholders, but legislation will ensure that they suffer no more tax than they do now, and this will include trustees.

Charit ies will have their tax credits phased out over five years from 1999.There has been much talk about Advance Corporation Tax (ACT), but this only serves to confuse because whatever ACT a company pays, it must pay out the shortfall between that and the cost of Corporation Tax in due course.Pension and PEPsEffectively, pension funds are now less attractive because they will lose 20% of their income, that being the current rate of tax credit.

Members of final salary schemes, based on service record and salary at retirement, are protected because employers are responsible for paying as much into the pension fund as is necessary.

It is the holders of personal pensions, which includes most solicitors, who will suffer.

For the time being at least, higher rate payers continue to enjoy 40% relief on pension contributions.

But that may not last.

Until April 1999, PEPs will give pension savers 25% higher income than they will enjoy from a pension fund.

And of course money paid into a PEP can always be recovered, unlike pension fund money where only 25% is recoverable, as a tax-free lump sum, when a pension is taken.

The rest of the fund is locked into a pension annuity, where ultimate value depends on length of life.

Death before pension age can produce much higher cash value! And that is only one of the gambles a personal pension involves.

A personal pension fund based on stocks and shares is ideally encashed when the market is high and when annuity rates are good.

A PEP may be held for ongoing tax-free income and is always available without tax penalty for redeployment at the investor's choice.

The incentive to divert pension savings into PEPs for the next two years, especially for basic rate taxpayers, is not strong.Individual Savings AccountsIn 1999 the new generation of ISAs arrives to supersede PEPs and TESSAs.

There is to be consultation on the details but some clues have been given.

The government wants to encourage personal savings, especially for those on low incomes, so there is hope for the non-taxpayers who are to lose their tax credits.

Long-term saving is to be encouraged, 'building on the five year period in the TESSA scheme', which could well mean that short-term investment is to be discouraged.

Tax breaks will be continued, and the Government is to build upon TESSAs and PEPs, refocusing and simplifying existing rules.There could be one savings vehicle to include then existing PEPs and TESSAs, but the new accounts will have tax reliefs 'up to an overall investment limit'.

If there are to be any retrospective implications in this, they would hardly fit the objective of encouraging people to provide for their own future in retirement as pensions become less attractive.CharitiesCharities are to have full review of their taxation, and the main focus of the review is to be the current VAT arrangements.

The aim, too, is consistency, simplicity and a reduction in compliance costs.Capital allowancesDouble capital allowances for small and medium-sized businesses for one year from 2 July 1997 provide a window of opportunity for solicitors and their clients to get on with desirable investment in equipment.VCTs and EISsVenture capital trusts and enterprise investment schemes seem to be a temporarily no-go area.

Their focus is to be sharpened, and after taking views from interested parties, legislation will be included in another budget next March, but effective from 2 July 1997.

Guaranteed loans for VCTs are likely to be excluded, and there will be a minimum ordinary share component of not less than 25% of each qualif ying investment made by a VCT.

Risk-reducing ploys, such as exit routes in EISs, will be stopped.

Meanwhile, caveat investor!Capital taxesConsultation on capital gains tax is to be completed in time for the next budget, but there was no mention in this one of inheritance tax.

There is at least a breathing space in which to utilise the tax breaks currently available.Tax avoidanceThe Chancellor is determined to introduce legislation with immediate effect to counter tax avoidance whenever and wherever necessary.

A few measures are already announced, and the Inland Revenue is to carry out a wide ranging review with a view to further proposals in future Finance Bills.

It rather looks as though the case law in tax matters could be in for a boom, as avoidance attracts legislation.