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company avc as lump sum
jaymac_2
Posts: 1,740 Forumite
My OH is retiring next month and one of his options is to take his AVC fund as a tax free lump sum. Can he really pay a lump sum into his AVC's this month, qualify for tax relief at 40% and then get it back next month? it seems too good to be true!
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Comments
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Probably, yes. The total amount of tax free cash will be 25% of the value of his pension. The value of his AVCs is the total fund at that time and, if he has a final salary pension, the value of that is 20 times the amount due to him.
Best to ask the administrators to confirm the maximum lump sum he can pay as an AVC and, if he pays it, that he could take his entire AVC fund as a lump sum. It is possible, but it depends on the size of his current AVC fund and the amount he wants to pay.Warning ..... I'm a peri-menopausal axe-wielding maniac
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