AVC

[tommi]

I am entitled to 150,000 tax free lump sum on retirement. However, as I am taking early retirement, I will receive about 115,000. I have an AVC valued at 80,000. I will use 35,000 of this to bring my lump sum up to the 150,000 threshold. If I use the remaining AVC (45,000) to buy an annuity, am I liable to be taxed on this amount (45,000) before I put it into an annuity? Thanks.

 

[Conan]

No.
However, if you buy an Annuity (or invest in an Approved Retirement Fund) with the balance you will be liable to tax on the income.

 

[tommi]

No.
However, if you buy an Annuity (or invest in an Approved Retirement Fund) with the balance you will be liable to tax on the income.

Many thanks. That's very helpful.