Phil_space
Registered User
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I'm a class 'D' pre-1995 PS employee. I will be short of 40 years service on retirement, and have been buying back some years through the NSP scheme. I'm considering taking out an AVC to boost my tax-free lump sum on retirement. Obviously my 'employer' will award me a tax-free lump sum of max 1.5 times my final salary.
My query is, if the accumulated AVC fund plus my actual lump exceeded the 1.5 times salary max could I take all of it tax free? Simple example. Let's say my final salary is 50k, so with full service (40 years) I would be entitled to a max tax-free lump sum of 75K. However, let's say I have 30 years service - my lump sum will be (50000 * 3/80 * 30 = 56250). If my AVC fund was worth 25k on retirement, could I take this in addition to my lump sum and get all of it (56250 + 25000 = 81250) tax-free? The pensions authority website seems to suggest that the first 200k of pension lump sums is tax free so I was wondering if this would apply in my hypothetical case above.
Thanks for any advice.
Phil
My query is, if the accumulated AVC fund plus my actual lump exceeded the 1.5 times salary max could I take all of it tax free? Simple example. Let's say my final salary is 50k, so with full service (40 years) I would be entitled to a max tax-free lump sum of 75K. However, let's say I have 30 years service - my lump sum will be (50000 * 3/80 * 30 = 56250). If my AVC fund was worth 25k on retirement, could I take this in addition to my lump sum and get all of it (56250 + 25000 = 81250) tax-free? The pensions authority website seems to suggest that the first 200k of pension lump sums is tax free so I was wondering if this would apply in my hypothetical case above.
Thanks for any advice.
Phil