# Pension refund, less than 2 years



## kildon (18 Mar 2012)

Hi, if someone left their job before completing 2 years serice and paid say 10k inpension contributions,  how much would they get back. Both for a higher and lower tax rate payer.

thx


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## LDFerguson (19 Mar 2012)

Regardless of the individual's tax rate, the rate of tax applicable to a refund of personal contributions *to an Occupational Pension Scheme* is 20%.

Liam D. Ferguson


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## kildon (19 Mar 2012)

Thanks


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## kildon (28 Mar 2012)

just to be clear on the above, I paid 10k in over say 20 months, my employer will refund me 10,000 * (1-20%) = 8,000

do I have to pay any other taxes on the 8k?


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## LDFerguson (28 Mar 2012)

Correct *IF* the value of your contributions is €10,000 now, with rises or falls in fund values.  

That aside, the tax of 20% is the only tax payable.  

This can give rise to a nice little tax-planning tip if you're back in employment and taxed at 41%.  Take the €8,000 refund - temporarily add €5,559 to it from your own resources - make a contribution of €13,559 to a new pension arrangement, subject to usual tax relief limits - claim back 41% tax relief on this contribution: €13,559 x 41% = €5,559.  Net cost €8,000.  Voila - you've just turned €10,000 in the previous pension scheme into €13,559 in your current one.


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## waom (10 Dec 2012)

*Tax on AVC refunds*

Does 20% tax apply to AVC refunds if less than 2 years service?

Would it be possible to make a lump sum AVC in advance of being made redundant?


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## leroy67 (10 Dec 2012)

[broken link removed]

You may be obliged, if you have less than two years qualifying service when you leave service, to take a refund of the value of your own contributions, less tax at the basic rate. Some plans may permit you to leave your contributions in the plan even though they are not required to do so by law. AVCs are treated in the same way as main plan benefits.

like the way you're thinking waom


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