TRS and CGT on the refund?

Gordon Gekko

Frequent Poster
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3,529
Yes, but not a gift. My sense is that the tax relief will have to be clawed back. Customers have obtained relief on interest that they didn't pay. But if Permo pay Revenue (i.e. take the hit), my view is that it will be a tax nothing and that Revenue will confirm this by way of an eBrief.
 

Sophrosyne

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978
I would share your suspicion.

Just to further complicate things, would any Revenue settlement discharged by PTSB on behalf of those concerned not itself be treated as a taxable benefit (a gift?) to those individual borrowers if it is not deducted from the compensation payments made by PTSB (which payments may also be taxable IMO)?
Let's not get ahead of ourselves.

It might serve to confuse posters entitled to settlements.

Let's first see whether or not settlements are reduced by excess TRS.
 

Sarenco

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5,378
Yes, but not a gift. My sense is that the tax relief will have to be clawed back. Customers have obtained relief on interest that they didn't pay. But if Permo pay Revenue (i.e. take the hit), my view is that it will be a tax nothing and that Revenue will confirm this by way of an eBrief.
You may well be right but the legislative basis for this is not immediately obvious to me - powerful and all as they are, Revenue can't legislate by eBrief!

In any event, if PTSB was to gross up the compensation package to include the excess TRS payments - and no further tax was payable in this regard by the relevant borrowers - well, that would be a pretty sweet deal. Not sure how I feel about that as a taxpayer/PTSB shareholder but this is going to be such a mess to resolve this is probably a minor detail in the grand scheme of things.
 

Sarenco

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5,378
Let's not get ahead of ourselves.

It might serve to confuse posters entitled to settlements.

Let's first see whether or not settlements are reduced by excess TRS.
Fair point. I'm sure this will all be sorted in the fullness of time.
 

Gordon Gekko

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3,529
You may well be right but the legislative basis for this is not immediately obvious to me - powerful and all as they are, Revenue can't legislate by eBrief!

In any event, if PTSB was to gross up the compensation package to include the excess TRS payments - and no further tax was payable in this regard by the relevant borrowers - well, that would be a pretty sweet deal. Not sure how I feel about that as a taxpayer/PTSB shareholder but this is going to be such a mess to resolve this is probably a minor detail in the grand scheme of things.
I prefer to look at it another way. Show my the legislative basis for it being taxable.

Not subject to CAT, CGT or income tax in my view.

Compensation is only subject to income tax if it's compensation for loss of income.
 

Sarenco

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5,378
Not sure I'd necessarily agree with that formulation. The exemption from taxation of most redress schemes or settlements is dealt with by way of specific legislation.

I thought this note on the taxation of compensation payments from the FSO in the UK was interesting - different legislative basis, obviously, but it clearly doesn't start with the assumption that compensation payments are not taxable.

http://www.financial-ombudsman.org.uk/publications/guidance/comp_tax.htm
 
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Tok 3165

Registered User
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3
We are part of the springboard redress scheme. This month we received no Trs on our mortgage payment. Our payment was €150 more than usual. I rang Springboard who couldn't answer any of my questions. Then rang revenue and was told we were overpaid Trs while being on the wrong interest rate and now have to pay back what we were overpaid. We will still be entitled to a lower amount of Trs but not until the overpaid amount has been paid back.
 

Brendan Burgess

Founder
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37,461
I got this email from ptsb today

"
We have agreed with Revenue that impacted customers have no obligations from a tax perspective as a result of the redress/ compensation payment. This includes customers with investment loans.


This means in practice that customers will not be deemed to be in an over claimed tax position for prior years as a result of the redress payment or being changed to a tracker margin."

Brendan
 

Junopops

Registered User
Messages
7
Thanks for the update Brendan. Do you know if PTSB will be writing to their customers with this information?
 

Junopops

Registered User
Messages
7
Hi Juno

I don't. It's very unsatisfactory that they don't issue a public statement on it.

Brendan
No problem. Thanks for the reply and thanks for all your information on the redress program so far. I've found this site to be a great help throughout it all.
 

kaza

Frequent Poster
Messages
175
Just with regards the TRS. I am wondering about the wording in their statement "customers will not be deemed to be in an over claimed tax position for prior years as a result of the redress payment"....

So can we take that to mean then are we for this year?

The max TRS we are entitled to as a couple is €150 per month, which is the amount of TRS we had being receiving on the SVR. We should now be roughly entitled to only half of that amount on our new lower interest rate. Normally, our TRS would adjust automatically based on interest paid two months previous. So I have been on the new interest rate well over two months now and my TRS has not automatically adjusted - it is still at €150. Why is this I wonder? So what I mean is currently I am still receiving too much TRS, and have effectively for all months of this year. Surely revenue will come looking for this from me? So basically what I mean is that I will owe them roughly €75 * 12 = €900 for this year
 

Sarenco

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5,378
The whole issue seems to be shrouded in mystery and, judging by Tok's post above, Revenue aren't necessarily adopting a consistent approach.

At this stage you would have expected that the tax treatment would have been clarified.
 

kaza

Frequent Poster
Messages
175
I made a call yesterday to PTSB to try and clarify the "prior years" term. He told me that PTSB are settling any over payments of TRS for the whole period of time we were on the wrong rate. So basically I changed onto new rate in July - so I have been told that TRS prior to July will not be questioned by revenue. It will just be TRS from July onwards. My rate of TRS has not automatically updated yet, so I will be counted as over receiving TRS for the second half of the year basically.
 
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