# AVC withdrawals (budget 2013)



## Crow Paddy

Michael Noonan said:
			
		

> I have been advised in numerous submissions of the value of allowing  limited early withdrawal from AVCs.  Therefore, in the Finance Bill I  will make provision for persons with AVCs to withdraw up to 30 per cent  of their value. Any amounts withdrawn will be subject to tax at the  individual's marginal rate since marginal rate relief was provided on  the contributions on the way in. The option will be available for a 3  year period from the passing of Finance Bill 2013


Presumably the details have still to be ironed out in the finance bill. But how will this work for personal pensions/PRSAs?

*Apologies. Just noticed the budget section. I'd delete the thread if I could...*


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## leroy67

Won't work out, stated it's for Additional Voluntary Contributions. Personal Pensions and PRSAs are different


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## mmurphy

hi
does this work if someone left a pension scheme some time back and put pension lump sum into a pension bond - can they avail of the part that was avcs? thanks


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## pierboy

Yes I see no reason why the new facility wont be open to AVCs in PRBS - generally the same rules apply to PRBs as to other types of occupational pension schemes


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## WizardDr

So lets be clear - X is put under pressure of bankruptcy and cashes in part of his AVC to pay off his creditors and the taxman does a smash and grab at his marginal tax rate?

Surely if the purposes were for debt reduction - and the Reevnues love of complexity - that the unfortunate could defer the addition to income unil it was supposed to arise as in after 65 when he would have a lower income.

This strikes me as a stupid measure, poorly thought out and allowing more pressure to facilitate creditors but at a tax cost on every € of extraction. Though its consistent with the sheer thievery of the deluded and dishonest pension levy.

Was this not called 'group' think, where the Department of Finance and Revenue in the heated room agree what is actually bad policy?


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## pierboy

Apart from responding to the demand from the public / industry the introduction of this option now appears to be a revenue raising exercise - I believe Revenue expect to take €100m.  From the Government's perspective it seems to be win/win.


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## LDFerguson

pierboy said:


> I believe Revenue expect to take €100m. From the Government's perspective it seems to be win/win.


 
I think that figure of €100M is pie in the sky.  I can't see there being much of a take-up on this scheme at all.  Also discussed in another thread.


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## Thomas50

Crow Paddy said:


> Presumably the details have still to be ironed out in the finance bill. But how will this work for personal pensions/PRSAs?
> 
> *Apologies. Just noticed the budget section. I'd delete the thread if I could...*


 
 Does anyone know when can we expect the Finance Bill to be passed ??
I would appreciate any comments !


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## LDFerguson

Typically it would be in February but it could be later.


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## Conan

The Finance Bill is generally published in early Feb. It will then take a number of weeks to go through the Dail & Seanad and should pass into law around end March or early April.
The Bill should detail how the AVC drawdown wil work.


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## blendedblue

*Bill published*



Conan said:


> The Finance Bill is generally published in early Feb. It will then take a number of weeks to go through the Dail & Seanad and should pass into law around end March or early April.
> The Bill should detail how the AVC drawdown wil work.



So now that the bill is published do I still have to wait until it goes through the Dail and Seanad until I can withdraw from my AVC? I thought that each of the articles in the bill were individually voted into law before the bill was published?

Also, having read through the Finance Bill fairly quickly it looks like only the marginal rate of tax is due on the withdrawal? There is no mention of USC or PRSI etc.?


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## Conan

Until the Bill is enacted, the provisions do not become law. 
The Bill proposes to allow one drawdown of 30% of AVC funds over next 3 years. Tax is a marginal rate, no PRSI or USC.


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## Medic112

Has the bill actually been passed ? Can funds now be drawn from AVCs ?

Many thanks


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## boaber

Yes, Bill was signed on 27th March


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## Medic112

Great I've contact newireland and they will have withdrawal forms available shortly.


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## Medic112

Paper work arrived today, fairly straight forward.


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