Couples warned to 'transfer money to partner' before 'Labour Party tax raid'

UK households have been advised to 'transfer money to a partner' before a Labour Party government tax raid, with Rachel Reeves potentially targeting pensions

UK households are being advised to "transfer their money to a partner" ahead of what is feared could be a tax raid by Rachel Reeves, with concerns that pensions might be targeted in her incoming Autumn Statement and her first fiscal Budget as Chancellor.

In light of looming changes, Sarah Coles, personal finance expert at Hargreaves Lansdown, has uncovered six tax-saving strategies to consider before the Autumn Budget. In a calm advisory tone, she commented: "We just need to be careful not to panic, smash the window, and damage ourselves and our finances clambering through it."

Coles further highlighted the importance of astute financial planning: "The key is to identify those that work for your overall finances, which you'll be grateful for even if you don't get the changes you were expecting."

Direct action such as pension contributions was strongly recommended, especially as there's been an "We've seen a surge in people maxing out their SIPPs so far this year in response to rumours that the Chancellor might have the annual allowance or tax relief in her sights."

Further insight was provided by Ms Morrissey on the substantial advantages for those who pay into a pension: "As a higher or additional rate taxpayer, you're benefiting enormously from tax relief that would see a £60,000 contribution cost just £36,000 for a higher rate taxpayer and £33,000 for someone paying additional rate tax.", reports Birmingham Live.

She also offered encouragement for those without large funds to invest, saying: "This has the potential to turbocharge your contribution up to a maximum of £200,000 this tax year (provided you earn at least that much per year). Don't worry if you don't have enormous sums to put away though, as even more modest sums will still benefit from tax relief, and time in the market will see it grow and build your retirement resilience."

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"If you've got a bit of extra money to invest now that the children have left home or that the mortgage is paid off, a contribution to your SIPP can be a great idea. It's also worth saying that pensions are not liable to capital gains or dividend tax either, so they remain a hugely tax efficient way to save."

She further highlighted the advantages of taking up ISAs and utilising capital gains tax (CGT), in addition to recommending asset transfers to a spouse. Ms Coles remarked: "This doesn't reset the tax to zero. However, they have their own allowances to take advantage of, so they can use their annual CGT allowance to cut the tax bill. If they pay a lower rate of income tax, they'll also pay at least some of the CGT at a lower rate too."

"They can also wrap investments in their annual ISA and pension allowances, to ensure as much of your collective wealth is invested as tax efficiently as possible."