Is it possible to divert some of a redundancy lump sum payment into an AVC, thus clawing back some of the tax payable on the lump sum? I am curently doing max. AVC's from salary @ 30%.
Yes there is no problem with doing that - you can still put in an AVC in respect of 2005 if you have not already maximised your contributions for 2005.
Best solution would be to forego some of your redundancy payment - ask the employer to put the money DIRECTLY into your pension instead, that is the neatest way.
I have already made the maximum contribution for 2005 - and for 2006 to date. My question really is: is the lump sum reckonable income for AVC contribution purposes? I could ask the employer to divert some of the lump sum directly into the pension but would I still be limited by the 30% rule in that case? Many Thanks.