Relative still claiming TRS fraudulently on inv property

Was helping a relative work out their tax for 2010. I noted they were still claiming Tax Relief at Source on a property they had to move from (new job - renting elsewhere).

In every other way they will be compliant with this property (PRTB and NPPR, declaring rental income)
I have told them to de-register for TRS immediately but I suspect because they are on a low salary and will have difficulty making up the shortfall/ paying the arrears that my advice is falling on deaf ears.

Are there any other reasons I can use to persuade them to comply?

The premise in your question suggests they are letting out their owned property.

As someone helping on a tax return you are probably more knowledgable than me but the following come to mind...

1. If they started renting before 7 dec 2010 they can claim relief on the rent they are paying.
2. the MIRAS they are still claiming is really quite small and will decrease further.
3. Does not the fact they have ,in effect, an investment ptoperty mean they claim 75% of all the inetrest as an expense?
4. But will interest on the loan increase as it is now not a home mortgage? there are many posts on this last point. It depends on loan conditions in the agreement.

oldnick said:

The premise in your question suggests they are letting out their owned property.
As someone helping on a tax return you are probably more knowledgable than me but the following come to mind...

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Yes they are letting out their own former PPR.
tbh I'm no expert but I was put in the same position myself and I was surprised at the amount of tax I had to pay on my own place. I just wanted to sit down with them so they wouldn't get a shock when it came to paying the tax.

oldnick said:

1. If they started renting before 7 dec 2010 they can claim relief on the rent they are paying.
3. Does not the fact they have ,in effect, an investment property mean they claim 75% of all the inetrest as an expense?

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Yes and Yes. Thanks

oldnick said:

2.The MIRAS they are still claiming is really quite small and will decrease further

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It's c. €100 per month and the arrears are building. Appreciate it will go down in time but this person has no savings. It's the issue of tax evasion I am concerned about and the trouble they might find themselves in.

oldnick said:

4. But will interest on the loan increase as it is now not a home mortgage? there are many posts on this last point. It depends on loan conditions in the agreement.

Click to expand...

It didn't occur to me at the time to mention this. They are on a tracker and loss of Tax Relief together with the increased Interest Margin would probably require them to move back and use it as their PPR. I'll read up on some of those other posts thanks!

At some stage the TRS office in Limerick will cross-reference his tax return of a rented property and he will be audited. He will fined and made pay back the TRS. Any other descrepencies could lead to further fines. He needs to call the TRS office and you can cancel the TRS over the phone. They will ask when your property was rented out from and will send you a bill for arrears due if he is straight and honest with them now. I cancelled mine years ago but it took me five months to actually achieve it due to problems getting through and them actually stopping it. They sent me a bill for arrears and I paid it. Note that I since moved back in and got any subsequent TRS due after that. Your friend will not lose out if they decide to move back in within the next 5 years. If he ignores this and they get a sniff of it, he will be in trouble.