Do I get TRS when I am paying interest only?

Hello

I'm carrying on a conversation from another poster on the variable rates campaign section of the forum. Their story has kinda raised alarm bells for me.

I was in arrears on my mortgage due to unemployment but I always paid at least interest only or as much as I could possibly afford with little to no income. My Tax Relief at Source stopped because I was informed that anybody who didn't make full payments or were in arrears didn't receive TRS under some new rules. I contacted a tax office and was told this is correct and took their word as gospel. I finally sorted my arrears mess out and now my mortgage is back in good stead but still no TRS applied. I have some questions if one of you kind people could answer please

Who is eligible for TRS?
Should TRS have been paid when I was at least paying interest only?
What data does your provider send to the Revenue Commissioners when your TRS is being put in place?

It was my post you are referring to the guidance on TRS is on the revenue website. Its clear that you get relief on what you actually pay not what you should pay. If you paid say 100 only you only get the rekief on the hundred. When i asked them why they think my bank was not giving me relief they said it was a matter for the bank. They were quite nice and I asked them could they advise the legislation where they base the guidance from after about 5 mins on hold they gave me the legislation. Had a read on it and its clear you qualify to get it on what you pay... Ive being stung about 6k by the bank using an interpretation contrary to law and revenue guidance

This explains the position.

See Are there changes being made as to how mortgage interest relief at source (TRS) is granted in 2014?

“In practice many Lenders calculated TRS based on the amount of interest charged to a mortgage account irrespective of whether the interest was paid by the borrower or not. From January 2014 this arrangement will be discontinued and Lenders must grant TRS based on the amount of interest actually paid by the borrower within a tax year.”

Raging Bull said:

It was my post you are referring to the guidance on TRS is on the revenue website. Its clear that you get relief on what you actually pay not what you should pay. If you paid say 100 only you only get the rekief on the hundred. When i asked them why they think my bank was not giving me relief they said it was a matter for the bank. They were quite nice and I asked them could they advise the legislation where they base the guidance from after about 5 mins on hold they gave me the legislation. Had a read on it and its clear you qualify to get it on what you pay... Ive being stung about 6k by the bank using an interpretation contrary to law and revenue guidance

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Is that still the case or did the bank rectify the TRS?

Its in Section 244 of Taxes and Consolidation Act 1997..wording is clear but my bank is taking an all or nothing approach

Plenty of people are getting done on this too and they dont know it

Raging Bull said:

Its in Section 244 of Taxes and Consolidation Act 1997..wording is clear but my bank is taking an all or nothing approach

Plenty of people are getting done on this too and they dont know it

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Do you mean that your bank is still not applying TRS in accordance with the Act?

Yes and despite me pointing this out to them and the revenue website they are correct in their eyes

Raging Bull said:

Its in Section 244 of Taxes and Consolidation Act 1997..wording is clear but my bank is taking an all or nothing approach

Plenty of people are getting done on this too and they dont know it

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Hang on, are you saying that some banks are deliberately not passing on the benefit of TRS payments received from Revenue to their customers? That's outrageous if true.

I don't know if its systemic accross all banks but that is how mine are acting

Could you name the bank?

My understanding is that lenders are required to apply the benefit of TRS payments to their borrowers' accounts in accordance with specific agreements with Revenue. If any lender is withholding these payments for their own benefit, in breach of these agreements, well, surely that's theft.

Are you absolutely sure of your facts here? I'm not doubting you but it's a pretty serious accusation.

Rather not say who it is as it is now a legal case

Not sure why they are doing what they are doing because its not in their interests. Makes no sense but they won't budge.

In my case they took some but not all of potential money from Revenue

Sorry you've lost me.

Are you saying your lender withheld the benefit of (some?) TRS payments or are you saying something else? The misappropriation of funds (i.e. theft) is a crime - why would it be the subject of a legal case?

Theft is too strong a word...my view is gross negligence. What they are doing and how they are interpreting the treatment of TRS is not in my favour and not really in theirs either.They claimed nothing off revenue in 2014 when they should have claimed about 2, 500

Well, if a lender receives a payment from Revenue for the benefit of a borrower and that lender intentionally fails to credit that borrower's account with that payment - that's theft, not negligence.

I don't understand what you mean when you say "they claimed nothing off revenue in 2014". It's not a lender's responsibility to claim any tax relief on behalf of a borrower - a lender is simply required to credit a borrower's account with the amount of TRS received or credited by Revenue.

Thanks OP for starting this thread.

Thanks Raging Bull for bringing more light to this case.

I can confirm there is more of this going on than we know. The reason I received for not receiving TRS was my lenders system was not compatible with Revenue format. If anyone can translate that excuse feel free to do so because I'm sitting here scratching my head.

Hi Sarenco, in my case I don't believe my provider received TRS and didn't apply it.to my two accounts. As far as what I understand they automatically stopped it over a missed repayment that I had and I am now finding it very difficult to reinstate TRS. Revenue tell me I am due a refund but the lender keeps returning my file back to Revenue marked (error). Why I do not know?

Kerrigan said:

Hi Sarenco, in my case I don't believe my provider received TRS and didn't apply it.to my two accounts. As far as what I understand they automatically stopped it over a missed repayment that I had and I am now finding it very difficult to reinstate TRS.

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Ah, understood.

That's certainly frustrating but perhaps not as scandalous as the intentional withholding of TRS payments by a lender.

That actually sounds like a genuine case of two IT systems not "speaking to each other" properly. You might consider escalating this issue to the bank's complaints dept if it doesn't get resolved quickly and ultimately making a complaint to the FSO. You obviously shouldn't have to chase anybody to resolve this issue but if you don't, this may never get resolved. Keep at it.

Kerrigan said:

Thanks OP for starting this thread.

Thanks Raging Bull for bringing more light to this case.

I can confirm there is more of this going on than we know. The reason I received for not receiving TRS was my lenders system was not compatible with Revenue format. If anyone can translate that excuse feel free to do so because I'm sitting here scratching my head.

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Did you report this to Revenue?

Sarenco said:

Ah, understood.

That actually sounds like a genuine case of two IT systems not "speaking to each other" properly. You might consider escalating this issue to the bank's complaints dept if it doesn't get resolved quickly and ultimately making a complaint to the FSO. You obviously shouldn't have to chase anybody to resolve this issue but if you don't, this may never get resolved. Keep at it.

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Perhaps it is a systems compatibility issue; and perhaps not.

See Complaint 20., page 55, to the FSO

“The Complainant contended that the Bank had misinterpreted how the Tax Relief at Source should be applied to his account.”

The complaint was not upheld.

Then see comments by cold case reviewer, Harold A. Whelehan, S.C.

“In this case, while the Finding went against the Complainant, there was no follow-up enquiry with the Complainant or with the Revenue as to whether his contention could be correct as to the alleged misinterpretation or mis-application of the Revenue provisions by the Respondent. It appears that he could have been invited to procure evidence from the identified official to whom he spoke which could have been obtained either through the Complainant or through the Bank and also the question of the information disclosed on the Bank’s website could, and perhaps should have been investigated, in order to specifically deal with the Complainant’s allegations.

Sophrosyne said:

Perhaps it is a systems compatibility issue; and perhaps not.
.

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For sure.

Lenders certainly should be treating taxpayers' money with the utmost of care and systems issues are no excuse for denying anybody a relief to which they are legally entitled for any longer than is absolutely necessary.

However, there's a world of difference between an organisation struggling to get their systems in order (or not putting sufficient resources in place to sort issues out in a prompt fashion) and a deliberate or conscious attempt to misappropriate funds, which appeared to be the original suggestion.