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Post-election Q&A: How can I protect my savings and pension pot in retirement under Labour?

A visual of The Telegraph's tax expert, Mike Warburton, responding to a reader question on message
A visual of The Telegraph's tax expert, Mike Warburton, responding to a reader question on message

As the country looks to a new government in the Labour party, The Telegraph’s tax expert, Mike Warburton, answered your questions on Tuesday July 9 at 6pm.

From questions on Labour’s impending tax and spending policies to how they might affect your finances, you asked Mike your questions in the comments section here.

07:05 PM BST

Thank you for all of your questions

That’s all for today’s Q&A. Thanks to those of you who sent in a question and apologies if you did not get an answer this time. Mike will be back again soon to answer more. You can also email questions to:

In the meantime, you can follow the week’s most important tax, property, investing and pensions news, analysis and tips by signing up to The Telegraph Money Newsletter.

07:05 PM BST

Am I a non-dom if I pay tax in Germany but live in the UK?

Our final question regards non-dom tax status.


Janet shares: “I’m a flight attendant with a German airline. German law requires me to pay tax, health insurance, benefit insurance etc. in Germany. I live in the UK (my job makes commuting do-able). Am I a non-dom? I can‘t afford to pay double tax.”

Another reader, Kevin replies: “No, you’re not a non-dom. You can’t be taxed twice, as there’s a double taxation agreement in place between the UK and Germany.”

Mike says: “I agree with the reply from Kevin.”

07:02 PM BST

What is the mechanism for changing tax rates?

The penultimate question for this Q&A comes from John.

John asks: “What is the mechanism for changing tax rates – is it exclusively a budget speech followed by a Finance Act? At the root of my question is the warning that we’re likely to get changes to CGT, IHT and pensions taxation. My instinct is not to worry until such events. Am I being naïve?”

Mike replies: “Most changes impact on future events, sometimes from the announcement itself. The last government introduced some retrospective legislation, wrongly in my view, but I do not expect this government to do so.”

07:00 PM BST

Do you expect the £20,000 ISA allowance to be reduced?

Isobel has a question on the ISA allowance.

Isobel asks: “Do you expect the £20,000 ISA allowance to be reduced or an overall limit on the amount placed in an ISA?”

Mike responds: “I anticipate a reduction in the annual contribution limit but not a cap on the fund size.”

06:59 PM BST

Will Labour bring back the lifetime allowance (LTA) in another form?

A question on the LTA up next.

Isobel says: “Labour has said it will not bring back the lifetime allowance. Do you think they might bring it back in another form, and is there any action you would take now to protect a pension which is over the old LTA? 

“While I am not due to retire until October, I’ve already crystallised my pension, but I am thinking about starting to draw monies out of the pension before Labour’s first budget. My pension is significantly above the old LTA.”

Mike replies: “I have suggested in previous articles that it may be wise to crystalise remaining funds, and this is what you have done. How much you should draw is another matter and depends on your age, investments and family circumstances.”

06:59 PM BST

Should Labour change pension assets to IHT, would this only apply to ‘unused’ pension assets from defined contribution (DC) pensions?

Donald would like to know: “Should the Government change pension assets to IHT, would this be for ‘unused’ pension assets from defined contribution (DC) pensions and not defined benefit pensions? If so, wouldn’t this be discriminatory against DC schemes?”

The Telegraph’s tax expert says: “It would be wholly unfair if this only applied to DC schemes, but much would depend on the way the defined benefit scheme was established. If the fund effectively dies with the member, I cannot see that there would be any remaining assets.”

06:52 PM BST

Will the VAT on school fees be illegal under the ECHR?

Now for a question on Labour’s proposed VAT raid.

Alexander asks: “Is the VAT on school fees being proposed against the basic human rights for free education, and illegal under the ECHR? Is there a possibility the courts could prevent this policy?”

Mike responds: “A number of very experienced judges have already said that the proposals are probably illegal under the ECHR. The whole proposal has not been thought through properly and I think will be counterproductive. All more for the lawyers to deal with, and do not expect a speedy outcome.”

06:50 PM BST

Will Labour increase CGT on renewable energy stocks and shares?

Zarif is after some advice as he looks to invest some money into renewable energy.

Zarif asks: “I am looking into investing some of my money into stocks and shares in the renewable energy sector. Under Labour, will they increase the capital gains tax on stocks and shares which ultimately leave me with less profits gained from any shares I sell?”

Our tax expert replies: “I think it is likely that Labour are looking at CGT for more revenue and this could be an increase in the tax rate on shares as well as other assets. I do not expect different rates for different sectors.”

06:47 PM BST

Do you expect Labour to equalise dividend taxes with income tax rates?

An anonymous reader suggests: “I’d be very interested to know what you think Labour will do to dividend taxes. Do you expect them to equalise the rates with income tax?”

Mike replies: “There are very good reasons why the income tax rates on dividends are less than on other sources of income. However, with the new government looking for more ways of raising tax this is a distinct possibility.”

06:44 PM BST

If I switch my primary residence, will I be liable for CGT if we decide to sell in a few years?

An anonymous reader shares: “We have two properties – one in England (primary residence) and one in Scotland. If we sold the one in England and switched our primary residence to the one in Scotland, would we be liable for capital gains tax on that property if we decided to sell it in a few years?”

Mike responds: “England and Scotland are united for this purpose, so the normal CGT rules on the primary residence apply. I have written several times about these rules, but if the demand is there I would be happy to do more. It is such a valuable relief.”

06:43 PM BST

I’m restricted to tax on pension contributions — if CGT is charged at the same rate as income tax, would this condition be taken off people like me?

Another question on capital gains tax now.

Lorna asks: “Currently all my incomes are regarded by the taxman as unearned income e.g. rental, shares, interest… and so I am restricted to only paying in £2,880 into my pension (and therefore can’t use pension contributions to bring my income down). If Labour changes the rules on CGT and it is charged at the same rate as income tax, surely then they would have to take this condition off people like me?”

Mike says: “As you say, without earnings or profits you are restricted to tax on pension contributions of £3,600 gross, or £2,880 net.

“What you suggest would be logical, but I rather doubt if there would be any change in the pension relief.”

06:37 PM BST

What is the risk of an exit tax on unrealised capital gains if you leave the UK?

Ben asks the next question.

Mike says: “I realise that CGT exit charges can apply in some countries, including the US, but so far I have not seen any suggestions that this is on the Chancellor’s list. I very much hope that it is not!”

06:37 PM BST

Could the rate of capital gains tax be increased and back-dated to April 6 2024?

Another interesting query on CGT.

Quercus questions: “If I sell assets (shares) now with substantial gains, is there any chance that the rate of capital gains tax can be increased and back-dated to April 6 2024 or will it only apply prospectively either from the date of any budget or the following (2025/6) tax year? I am not a higher-rate taxpayer.”

Mike responds: “It is possible but highly unlikely in my view that there will be backdated (retrospective) legislation on this. When George Osborne increased the CGT rate in 2010 it only applied from the budget announcement.”

06:36 PM BST

What will Labour do with the rules for furnished holiday letting?

One reader is curious whether there is an advantage to selling up now.

Martin asks: “What do you think Labour will do with the rules for furnished holiday letting? Is there an advantage to selling up now – a little sooner than we originally planned (2027)?”

Mike says: “I am sorry to say that this may be a target for the new government. The reliefs were introduced to support tourism but that seems this has been forgotten by both this government and the last one. What I would expect is to make them pay full council tax rather than business rates which in most cases escape under the small business rules.”

06:32 PM BST

Will Labour’s tax policies interfere with my ISA?

Reader Jeffrey is concerned about a Labour attack on his ISA.

Jeffrey says: “It represents 30 years of hard saving and denying spending to build a pot for my retirement and possible care home fees. I’ve seen suggestions of capping at 100k. This would mean a large annual tax charge for me on dividends and CGT. Am I right to be worried?”

Mike replies: “You are right to be concerned about how tax rules may change, but so far I have not seen anything to suggest that existing ISA savings will be touched. My guess is that any change will be to restrict the annual contribution allowed.”

06:26 PM BST

How quickly will changes occur if Labour amends the seven-year potentially exempt transfer (PET) rule?

Anuj questions: “If Labour amends the seven-year PET rule, are the changes likely to be enforceable from the day of the budget or the beginning of the next tax year 2025/2026?”

Mike replies: “If they change the seven-year rule I think this would be to extend it to perhaps 10 years rather than cancel it completely (as was the case in 1975 when it was first introduced by Labour as Capital Transfer Tax) I suspect that the change would be from the announcement.”

06:26 PM BST

Will I be liable for CGT if I convert my share portfolio on a Bed and Isa basis annually?

A reader would like to know whether they will be liable for capital gains tax.

An anonymous reader poses the question: “If I convert my share portfolio on a Bed and ISA basis annually (up to the £20,000 limit) then will I be liable for capital gains tax, especially the new tax? Or will the money come from capital used to buy the shares and therefore attract no tax?”

Mike responds: “When you transfer shares into an ISA you technically sell them and the ISA then buys them. As a consequence, there is a CGT disposal of the shares at the time using the normal rules. The reduction in the annual CGT exemption has made life much more difficult.”

06:23 PM BST

If I was not a resident anywhere, would I be liable for tax nowhere?

One reader is curious about non-residency and tax.

L. Potter would like to know: “If I lived less than 180 days in Italy (broken into chunks the length allowed by Brexit) and less than 180 days in the UK, spending say three weeks on holiday as well, would I be liable for tax nowhere?”

Mike answers: “It is theoretically possible to be not resident anywhere, although the rules are both complicated and different in each company. I used to give two-hour seminars on the UK statutory residence test and only ever managed the highlights, but I could write an introductory article on this if there was sufficient interest.”

06:19 PM BST

Is major tax reform needed in the UK?

Philip asks: “Do you think that major tax reform is needed in the UK?”

Mike says: “We certainly need tax simplification and a properly functioning HMRC. I always shudder when chancellors say they will reform a tax because it seldom makes it simpler and often just reinvents the wheel. They need to study tax history better in my view!”

06:18 PM BST

What will the new government do about inheritance tax and the seven-year rule?

Next up, a question on the seven-year rule.

Nickesh writes: “What do you think will happen to inheritance tax and will the seven-year rule still remain?”

Our tax expert weighs in: “I fear that the new government intends to extract more tax from us in both CGT and IHT. The seven-year rule could be extended to perhaps ten years or longer to make it harder for wealth to be given away in lifetime. I see that as more likely than a rate change. Remember that in 1975 it was introduced as Capital Transfer Tax (CTT) with a lifetime cumulation!”

06:16 PM BST

How much tax will I have to pay for selling my house?

06:12 PM BST

Will Labour remove the tax-free allowances on deposit-based investments?

Michael asks: “Surely the first thing the fools will do is remove the £1,000 and £500 tax-free allowance on deposit-based investments and then £5,000 extra allowance for those who don’t make the personal allowance?”

Mike replies: “The allowances mainly exist to make life simpler for HMRC. My guess is that these will remain, but I could be wrong about that.”

06:08 PM BST

How can I protect my savings and pension pot in retirement under Labour?

Next up, a question about early retirement.

Jamie says: “At 52 with a pension pot of £1.1m and no longer working (i.e. living off savings until I turn 55), and therefore not contributing, is there anything I can do to avoid any of the possible scenarios mentioned in your last Q&A session? I am afraid not, but I would appreciate any tips.”

Mike responds: “Our new chancellor announced that she has cancelled her plans to re-introduce the lifetime allowance charge, having discovered how difficult it would be to do so. That does not necessarily mean that the position could not change in the future. There is the risk that the lifetime allowance cap used for tax-free lump sums could be reduced. Strictly this was replaced in April by the £268,275 lump sum allowance and the £1,073,100 lump sum and death benefit allowance, although they have a similar effect.

“There is also a risk the tax relief on pension contributions could be restricted. It may sound negative, but for your position and age, I think you are probably best sitting it out until we have a better idea of what the chancellor is intending to do, probably in her planned Autumn statement. There is a risk that actions taken now could be counterproductive.”

06:03 PM BST

Will this co-ownership arrangement result in me paying no inheritance tax?

05:57 PM BST

If Labour were to bring pensions within an estate for inheritance purposes, would that be the existing pot?

Graham asks: “If Labour were to bring pensions within an estate for inheritance purposes, would that be the existing pot or any amount added from the date of legislation? If it were to be on an existing pot then surely that would be enormously damaging to millions?

Mike says: “I think it would catch existing pots on the basis that the charge only applies on a future death.”

05:54 PM BST

What does Labour mean when it says we have the highest taxation for 70 years?

One reader asks for clarification on the country’s tax burden.

Richard would like to know: “What does Labour mean when it says we have the highest taxation for 70 years? Is this a tax take which, for example, will increase from VAT if prices continue to rise as they will?”

Mike replies: “The overall tax burden taking into account the various taxes is at a 70 year high. That does not mean that it cannot go higher!”

05:51 PM BST

Can my wife avoid a CGT charge if she transfers her share of our house let to me?

First up, we have a question on capital gains tax (CGT).

L.D. Havill asks: “My wife and I jointly own a house let, can she transfer her share to me without incurring a capital gains tax charge?”

Mike responds: “Yes you can. Assets transfer free of CGT between married couples.”

05:24 PM BST

Q&A is starting shortly

Hello all. This Q&A will be getting underway shortly. Our tax expert, Mike Warburton, is on hand to answer your tax-related questions.

Please leave your questions in the comments section below for our expert to answer – just look for the speech bubble underneath this post.

04:58 PM BST

Introducing The Telegraph’s tax expert: Mike Warburton

Mike is a tax expert who has had the ear of chancellors and policymakers for over 40 years. He was a director at accountants Grant Thornton and is now retired.

He writes the Telegraph’s weekly tax advice column and will be here to answer your reader questions in an hour.

A photo of Mike Warburton smiling with his arms crossed
The Telegraph's tax expert, Mike Warburton. - John Lawrence/TMG John Lawrence