There will be no tax liability for those receiving tracker redress

Hi Danika Yes and as I stated above last Saturday it appears that all lenders will have to treat affected customers the same as the customers in the PTSB Redress Process, some might look to take differing positions but the circumstance is already established with PTSB I should have more confirmation of this in the coming weeks Padraic
 
Michael McGrath has got the following answer in the Dáil



QUESTION NO: 75
DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Michael McGrath
for WRITTEN ANSWER on 23/11/2016


To ask the Minister for Finance if he will address a taxation query (details supplied).

REPLY.



It is understood the matter referred to by the Deputy concerns a redress scheme for customers of a financial institution relating to access to tracker mortgages. Before determining the tax consequences on this matter the Revenue Commissioners have advised me that they would need to examine the detailed documentation. However, it is also understood that should a tax liability attach to any element of the redress scheme, the tax liability will be discharged by the relevant financial institution.
 
The Central Bank issued this guideline to lenders

[broken link removed]Principles for Lenders when Tracker Mortgage Related Issues Identified for Redress (Principles for Redress)

1.3.4 Any tax liability that impacted customers may incur as a result of the relevant issue or in
respect of any redress, compensation or other payment made to impacted customers by the
lender, as a result of the relevant issue, are to be discharged by the lender. The lender is to
liaise directly with Revenue in this regard.
 
That document is dated December 2015 and there is still zero clarity as to how the multiple tax issues arising from this mess are going to be addressed. Has the Central Bank asked the banks for an update on this matter following their discussions with Revenue?

Take the example of a borrower that was overcharged interest on a BTL mortgage and claimed the excess interest as a deduction on his income tax returns. How will that matter now be settled with Revenue?

Will there be some sort of an amnesty? If so, that means the value of the redress/compensation will be dependent on the tax position of the impacted borrower. Does that seem fair?
 
A spokesperson for the Central Bank said its principles governing the tracker redress programme clearly set out that: “Any tax liability that impacted customers may incur as a result of the relevant issue or in respect of any redress, compensation or other payment made to impacted customers by the lender, as a result of the relevant issue, are to be discharged by the lender.”
 
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