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AVC question

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  • 12-05-2012 2:06pm
    #1
    loolloo78
    Registered Users Posts: 20 ✭


    studying for exams at the mo and cant get my head around this question on AVC's. can anyone explain how to work it out for me? as i keep coming up with the wrong answer.

    Christopher is 42 and he is a member of his employer's occupational pension scheme. His basic salary is €72,000 per annum and he also has a company car with a taxable value of €6,000. He contributes 6% of his basic salary to his employer's occupational pension scheme. Ignoring tax relief, what is the MAXIMUM Additional Voluntary Contribution (AVC) Christopher can make in 2008 if he is to be eligible for tax relief on the entire contribution?


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    #2
    Liam D Ferguson
    Registered Users Posts: 542 ✭✭✭Liam D Ferguson


    Total pensionable remuneration including car BIK = €78,000.

    Maximum pension contribution by age 25% of €78,000 = €19,500.

    Current contribution €72,000 x 6% = €4,320.

    Maximum allowable AVC = €19,500 - €4,320 = €15,180.


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    #3
    loolloo78
    Registered Users Posts: 20 ✭loolloo78


    Thanks a mill. I understand now!


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