Income tax refund for lump sum AVC question?

[JasMan]

Hi - I plan to make a lump sum AVC to my pension. I am able to contribute up to 20% of my salary tax free. I understand from some websites that I can contribute the balance between what I have already contributed and 20% tax free - I don't have to take into account what my employers pays - is this correct?

Secondly - I also understand that before Oct 31st this year I can contribute lump sum AVC against 2005 salary - is that correct?

Say for example that the balance between what I already have contributed and 20% of my salary is €10,000 (roughly €5,000 per year 2005 and 2006) - how do I now go about and claim back 42% income tax - do I need to wait and complete a tax return at year end?
How do I then receive this €4,200 - is it a cheque from revenue or pay less tax in 2007 to the sum of €4,200?

I am a real novice when it comes to pensions and tax and appreciate any help you can provide me with this - I have searched this forum and revenue.ie and didn't find anything clear on this. A simple explaination would be appreciated!!!

 

[ClubMan]

Hi - I plan to make a lump sum AVC to my pension. I am able to contribute up to 20% of my salary tax free. I understand from some websites that I can contribute the balance between what I have already contributed and 20% tax free - I don't have to take into account what my employers pays - is this correct?

See this thread.

Secondly - I also understand that before Oct 31st this year I can contribute lump sum AVC against 2005 salary - is that correct?

Correct.

October 31 - what does it mean for PAYE worker?

Say for example that the balance between what I already have contributed and 20% of my salary is €10,000 (roughly €5,000 per year 2005 and 2006) - how do I now go about and claim back 42% income tax - do I need to wait and complete a tax return at year end?

Just write to Revenue with details of the contribution (e.g. proof of payment) and a copy of your P60 for the relevant tax year and they should process the claim. You need to claim PRSI back separately. See here.

How do I then receive this €4,200 - is it a cheque from revenue or pay less tax in 2007 to the sum of €4,200?

In my experience they issue a repayment by cheque or lodged to your bank account if you choose.