foward application of AVC tax relief

[Ndiddy]

if you are currently part of a occupational DC plan with low fees:

1) Could you add a lump sum contribution over your age-related tax relief right before leaving and then carry forward your tax relief into a future job?

2) 45 year old adds 50k to their low cost DC plan over and above their normal AVC amount in 2021. Quits in 2022. New job has no pension plan option, but can the person now apply 25% of whatever pay they get to the 50k lump sum for tax relief?

3) Would this mean at age 50+, the low cost plan can be accessed?

4) If you are close-ish to being able to access from age 50 on, would this be a way to increase investments without going outside of tax wrapper(with deemed disposal/CGT taxes, etc.) and increasing a larger 25% tax-free lump sum?

 

[Marc]

Yep, we do this kind of planning all the time for clients. Arguably, you should use a PRSA AVC just to be sure you can carry forward the relief to a new job.

Revenue could possibly get arsey otherwise. It’s fairly uncharted water as to exactly how they would view this.

The biggest risk is not to overfund the occupational scheme beyond the revenue maximums as any overfund goes back to the employer as a trading receipt but otherwise very sound logic

Maximum AVC Contributions - Everlake

There isn't a maximum contribution you can pay into your pension. Pay a lump sum to your pension now and carry forward the tax relief.

globalwealth.ie

 

[Oisin19]

I am not sure you could carry the tax relief against earnings into your new job. As the new job has no pension scheme that employment would be non pensionable, and to get tax relief on these earnings pension contributions should be made to a PRSA.

Each contribution is linked to a salary and service or self employed earnings. If you were able to get tax relief on the proposed plan I don't think you should be retiring those contributions until age 60 or when you leave the new job.

 

[nest egg]

Sorry for resurrecting an old thread but I'd never heard the idea of carrying forward pension contributions, interesting idea.

Confused about one thing, I came across this document from Irish Life (page 14), stating "you can carry forward the relief on the excess to future tax years as long as you are with the same employer."

How does using a PRSA AVC change anything in that regard?