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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15749
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Can I lower, via an AVC (into my pension), my income tax threshold

Customer Question

Can I lower, via an AVC (into my pension), my income tax threshold to the lower rate for Capital Gains Tax purposes?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.

How do you pay your AVC? Is it a gross payment into an employer scheme or is it paid into the scheme via your payslip?
Customer: replied 1 year ago.

I just need to check with my HR Dept - I'll come back shortly.

Expert:  TonyTax replied 1 year ago.
OK. You should ask them if tax relief is given via the payslip, ie is the contribution deducted from the pay before the tax is worked out?
Customer: replied 1 year ago.

Not sure if my last reply went through?

This is what HR told me:

AVC’s are paid through payroll, your contribution is deducted after the tax has been calculated

Thanks

C

Expert:  TonyTax replied 1 year ago.
Thanks.

However, the answer from your HR people seems somewhat ambiguous? Are they saying that no tax relief is given at source and that the gross AVC which is deducted from your pay will be paid direct to the pension plan provider so that they don't need to reclaim the basic rate tax relief?
Customer: replied 1 year ago.

I'm not 100% sure. I will go and ask them a bit later. Thanks for your help so far

Expert:  TonyTax replied 1 year ago.

OK. Either way, it will affect the CGT rates applied to any capital gains.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15749
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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Expert:  TonyTax replied 1 year ago.
Thanks for accepting my answer.

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