Sarenco I was more interested in how compensation is applied for overcharging than the issue about TRS. Would you happen to know. Also I wonder how the ombudsman rules over there in such cases where there is long term overcharging.Mortgage interest relief was abolished years ago in the UK so the issue wouldn't arise.
I do know that compensation paid in the context of the PPI scandal was taxable in the hands of the policyholders.
The taxation aspect is a matter for revenue, if it were me I'd have sent an email to revenue for a decision on it. But I personally think given the stress people have been under that it should not be taxable, like compensation for personal injuries. Of course revenue have to look to the law so I suspect it is taxable.