Last Minute AVC
Many people we deal with like to know ‘how to
This can be of major benefit to employees but there are also instances where it will not be possible.
The opportunity for
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Calculating Last Minute AVC
There are three main variables at play in calculating the advantages in making a last minute AVC contribution. The first factor involved revolves around your salary, the second variable is your service. Your employer Tax Free lump-sum is likely to be Less than the maximum allowed by Revenue rules because you :
- Received a reduction in salary in recent years, even if you have full service, and/or
- Are short service, you may have less than full service (typically 40 years), and/or
- Have non-pensionable earnings (e.g. Overtime, ex-gratia payments, etc)
- Are retiring under Cost Neutral conditions
- Retirement is under ill-health
Tax relief is the third main variable involved in calculating your Last Minute AVC scope. Therefore, when calculating what amount should be contributed (if any) we must also establish what is the maximum amount allowable for tax relief purposes.
Relevant factors involved here include age, pensionable salary and
If the contribution is made and tax return is submitted before October 31st the client can also use tax relief allowable from the previous tax year.
Do contact us if you would like us to the crunch the numbers for you.
Common queries we deal with include:
In summary, the benefits of a Last Minute AVC include:
- Tax refund on pension contributions
- Maximising your tax-free cash lump sum at retirement
The rules in this area are complex. Please let us know if you would like us to examine your circumstances for assessment of your last minute AVC options.
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