Will tracker refund and compensation be taxable?

Sarenco

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blured

Registered User
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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?
Has there been any discussion on this at all? I'm in this boat, have had my tracker restored, just waiting on redress. If they just apply the over charged interest to the mortgage balance and I have to revise my tax returns for over claimed interest, I'll have to come up with the cash to pay revenue
 

KBCTracker

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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.”
 

elacsaplau

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587
Does anyone know the tax treatment where a bank refunded over-charged interest to an individual who was not formally part of the redress scheme?
Alternatively, the name of any tax consultant who specialises in this area?
 

WizardDr

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1,128
1. What was treatment of previous interest paid as in was it fully / partially / none allowed for tax?

2. Revenue wont reopen previous years.

3. Say Fully allowable: If you get refund say €5k this year - and you have €7k allowable this year then this will be reduced by €5k

Depends on facts.
 

Shakespeare

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116
Hi
Slightly different bent on this compensation question but I cannot seem to get a proper feel for what's going on here:
Situation:
Customer made complaint about not being allowed lodge funds to a savings account, long story short, bank has agreed to pay the amount of interest that should have been earned on that money over an almost 2 year period. The bank are clear that they are going to pay the net amount that the customer would have received, ie net of the DIRT that would have been paid had the money been in the account earning interest. Fair enough. However, the Bank are adamant that this payment is being called compensation (not refund, not payment of interest etc) and I am concerned that their use of this terminology is deliberate:
1. It may leave me open to a tax claim inspite of it effectively being only a repayment of what should have been earned and net of the DIRT that would have been paid and
2. It seems that by calling it compensation rather than anything else, that though I get the net amount, there isn't actually anyone ie Revenue getting the DIRT that would have been paid on it earned correctly so this really suits the bank but still may leave me exposed by virtue of the terminology being used

I need to revert to the bank (indirectly) on this and I am concerned about accepting what they are proposing

Can anyone shed any light on this?
Thanks for reading
S
 
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