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Last minute AVC

  • 10-10-2024 09:21PM
    #1
    Baoithin66
    Registered Users, Registered Users 2 Posts: 215 ✭✭


    I have received conflicting advice on last minute AVC's. Two advisors has stated that a last minute AVC is an option even though I will reach the maximum lump sum amount when I retire (1 1/2 times my salary). Another has said that where you reach the maximum lump sum amount that a last minute AVC is not an option. I have found the advice on the Revenue website which states the maximum tax free lump sum is €200,000 but cannot a reference to 1 1/2 times of salary.



Comments

  • #2
    The J Stands for Jay
    Registered Users, Registered Users 2 Posts: 5,910 ✭✭✭The J Stands for Jay


    Revenue will have the lump sum listed as either 150% or 120/80ths



  • #3
    homer911
    Registered Users, Registered Users 2 Posts: 5,067 ✭✭✭homer911


    Can you point me to this rule on the Revenue's website?



  • #4
    Unknownability
    Registered Users, Registered Users 2 Posts: 1,015 ✭✭✭Unknownability


    https://www.boards.ie/discussion/comment/122707053#Comment_122707053

    https://www.revenue.ie/en/tax-professionals/tdm/pensions/chapter-07.pdf



  • #5
    Cairnq1
    Registered Users, Registered Users 2 Posts: 13 ✭Cairnq1


    I assume you are public sector??? Re. last minute AVC. as a member of a defined benefit scheme your max tax free lumps sum from your employer is 1.5 x salary. However even though you have full service and maximum benefits you may be able to do a last minute AVC. A pension rule known as 'dynamisation' allows you use any salary in the last 4 years, apply inflation to it and then use that notional salary to calculate the 1.5 x salary. e.g 2024 salary of €50k max lump is €75k. a salary of €45k in December 2020 with inflation gives a notional salary of €54k today so €54 x 1.5 = €81k. then you could do a last minute AVC of €6k tax relief at marginal rate and get it back tax free after you retire. Talk to an independant broker experienced in public sector pension..



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