Encashment of Last Minute AVC

M

Mebs

Registered User
Messages
52
My sister is a primary teacher hoping to take early retirement next summer. She hopes to take out a last minute AVC to make up her shortfall as she will be short about 3 years service.
She will have to pay approximately €10 000 into the AVC before the end of August (her proposed retirement date).
My question is, when can she then encash the AVC?
Must she wait till the start of the following year (new tax year) or can she do it before then?

Thanks.
 
An AVC is an additional pension structure and thus must be accessed when the main pension is being activated.
If she is putting €10k into an AVC I assume from your post it is to max out her tax-free lump sum? Thus she will get tax relief on the €10k and presumably get the €10k back as part of her tax-free lump sum.
 
All correct, Conan.

She's been told by a colleague that she can get back the lump sum invested within a month or two. Is that correct?

She would claim the tax relief in the following year's tax returns, I think.
 
If she has almost a year to go before retirement, she might be able to invest some of the AVC’s monthly and thus get tax relief as part of “net pay facility”. If she has to invest any any as a “last minute AVC” then she would reclaim the tax relief by making a tax return for 2018 in early 2019.
Once the AVC money is invested, she draws this fund down as part of her retirement package. So yes she should get it back shortly after retiring.
 
You must log in or register to reply here.
Back
Top