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Paying into AVC going over £40K (no c/fwd)
Tiggy777
Posts: 121 Forumite
Hi all
I have been paying into an AVC with Prudential through my salary (Local Government) and I have also been paying into the LGPS. Idea was to maximise my pension pot with a few years to go until retirement. I have been paying the maximum amount basically most of my salary.
Question is as this year I will go over the £40k limit with no carry forwards balances from the previous 3 years what do I pay tax on i.e.is it the amount above £40K (AVC + LGPS amounts) ?
I am tempted if possible just to keep going and I also have rental income and before contributing into the AVC I was going into the 40% tax bracket (salary+rental income) so paying the AVC meant the taxable rental income has dropped as my taxable salary was only about £4k pa.
Would appreciate any comments on this in terms I am doing the right thing going forward.
Many thanks you for any advice and your time
Regards
Tiggy
I have been paying into an AVC with Prudential through my salary (Local Government) and I have also been paying into the LGPS. Idea was to maximise my pension pot with a few years to go until retirement. I have been paying the maximum amount basically most of my salary.
Question is as this year I will go over the £40k limit with no carry forwards balances from the previous 3 years what do I pay tax on i.e.is it the amount above £40K (AVC + LGPS amounts) ?
I am tempted if possible just to keep going and I also have rental income and before contributing into the AVC I was going into the 40% tax bracket (salary+rental income) so paying the AVC meant the taxable rental income has dropped as my taxable salary was only about £4k pa.
Would appreciate any comments on this in terms I am doing the right thing going forward.
Many thanks you for any advice and your time
Regards
Tiggy
0
Comments
-
www.lgpsmember.org/more/aa-quick-check-tool.php
It isn't the amount of your contributions that determine your LGPS AA, it's the increase in the value of your benefits.
Above link may be of help. AA it isn't the easiest of things to get to grips with, but your LGPS should have an in-house expert you can speak to if necessary.
ADD: Your LGPS should be maintaining a list of those likely to breach the AA, and my be ahead of you if you do.0
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