can I make an AVC contribution w/out having pension?

[harza]

I join a new company next Tuesday. However, I wiill not be added to the pension scheme unitil the start of next month (1 November). I have never had a pension to date. My query is can I make an AVC contribution before the 31 October deadline? My thoughts are that i can't as it's Additional Voluntary Contributions but thought it worth checking.

 

[ClubMan]

You obviously have to have some sort of pension fund set up to make an AVC! You could start a pension just for this AVC before October 31st but you are cutting it very tight.

 

[LDFerguson]

I'm assuming you did have taxable income in 2006, hence the desire to make a contribution before the end of October.

If so, you can make a lump sum Personal Pension or PRSA contribution as you're in non-pensionable employment for the purposes of the contribution. As ClubMan says, be quick.

 

[harza]

Didn't get my act together in time for this year's deadline!
Can I make lump sum up until 31 October 2008 for this tax year (2007)? As I will only have 2 months pension paid in 2007 will this effect the amount of lump sum I could make i.e. would it be pro rata?

 

[ClubMan]

Can I make lump sum up until 31 October 2008 for this tax year (2007)?

Yes.

As I will only have 2 months pension paid in 2007 will this effect the amount of lump sum I could make i.e. would it be pro rata?

You can contribute up to your age related tax relief percentage of gross income less the two contributions and still claim full tax and PRSI relief on the lump sum. You can even exceed this but will not get tax/PRSI relief on the excess over the limit.

Don't leave it so late next time. Talk to an independent, professional advisor if in any doubt.