# Do I get TRS when I am paying interest only?



## PatrickJ (28 Aug 2015)

Hello

I'm carrying on a conversation from another poster on the variable rates campaign section of the forum.  Their story has kinda raised alarm bells for me.

I was in arrears on my mortgage due to unemployment but I always paid at least interest only or as much as I could possibly afford with little to no income.  My Tax Relief at Source stopped because I was informed that anybody who didn't make full payments or were in arrears didn't receive TRS under some new rules.  I contacted a tax office and was told this is correct and took their word as gospel.  I finally sorted my arrears mess out and now my mortgage is back  in good stead but still no TRS applied.  I have some questions if one of you kind people could answer please

Who is eligible for TRS?
Should TRS have been paid when I was at least paying interest only?
What data does your provider send to the Revenue Commissioners when your TRS is being put in place?


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## Raging Bull (28 Aug 2015)

It was my post you are referring to the guidance on TRS is on the revenue website.  Its clear that you get relief on what you actually pay not what you should pay.  If you paid say 100 only you only get the rekief on the hundred. When i asked them why they think my bank was not giving me relief they said it was a matter for the bank.  They were quite nice and I asked them could they advise the legislation where they base the guidance from after about 5 mins on hold they gave me the legislation.   Had a read on it and its clear you qualify to get it on what you pay... Ive being stung about 6k by the bank using an interpretation contrary to law and revenue guidance


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## Sophrosyne (28 Aug 2015)

This explains the position.

See *Are there changes being made as to how mortgage interest relief at source (TRS) is granted in 2014?*

“In practice many Lenders calculated TRS based on the amount of interest charged to a mortgage account irrespective of whether the interest was paid by the borrower or not. From January 2014 this arrangement will be discontinued and Lenders must grant TRS based on the amount of interest actually paid by the borrower within a tax year.”


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## Sophrosyne (28 Aug 2015)

Raging Bull said:


> It was my post you are referring to the guidance on TRS is on the revenue website.  Its clear that you get relief on what you actually pay not what you should pay.  If you paid say 100 only you only get the rekief on the hundred. When i asked them why they think my bank was not giving me relief they said it was a matter for the bank.  They were quite nice and I asked them could they advise the legislation where they base the guidance from after about 5 mins on hold they gave me the legislation.   Had a read on it and its clear you qualify to get it on what you pay... Ive being stung about 6k by the bank using an interpretation contrary to law and revenue guidance


 
Is that still the case or did the bank rectify the TRS?


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## Raging Bull (28 Aug 2015)

Its in Section 244 of Taxes and Consolidation Act 1997..wording is clear but my bank is taking an all or nothing approach

Plenty of people are getting done on this too and they dont know it


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## Sophrosyne (28 Aug 2015)

Raging Bull said:


> Its in Section 244 of Taxes and Consolidation Act 1997..wording is clear but my bank is taking an all or nothing approach
> 
> Plenty of people are getting done on this too and they dont know it


 
Do you mean that your bank is _still_ not applying TRS in accordance with the Act?


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## Raging Bull (28 Aug 2015)

Yes and despite me pointing this out to them and the revenue website they are correct in their eyes


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## Sarenco (28 Aug 2015)

Raging Bull said:


> Its in Section 244 of Taxes and Consolidation Act 1997..wording is clear but my bank is taking an all or nothing approach
> 
> Plenty of people are getting done on this too and they dont know it



Hang on, are you saying that some banks are deliberately not passing on the benefit of TRS payments received from Revenue to their customers?  That's outrageous if true.


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## Raging Bull (28 Aug 2015)

I don't know if its systemic accross all banks but that is how mine are acting


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## Sarenco (28 Aug 2015)

Could you name the bank?  

My understanding is that lenders are required to apply the benefit of TRS payments to their borrowers' accounts in accordance with specific agreements with Revenue.  If any lender is withholding these payments for their own benefit, in breach of these agreements, well, surely that's theft.  

Are you absolutely sure of your facts here?  I'm not doubting you but it's a pretty serious accusation.


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## Raging Bull (28 Aug 2015)

Rather not say who it is as it is now a legal case

Not sure why they are doing what they are doing because its not in their interests. Makes no sense but they won't budge.

In my case they took some but not all of potential money from Revenue


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## Sarenco (28 Aug 2015)

Sorry you've lost me.  

Are you saying your lender withheld the benefit of (some?) TRS payments or are you saying something else?  The misappropriation of funds (i.e. theft) is a crime - why would it be the subject of a legal case?


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## Raging Bull (28 Aug 2015)

Theft is too strong a word...my view is gross negligence. What they are doing and how they are interpreting the treatment of TRS is not in my favour and not really in theirs either.They claimed nothing off revenue in 2014  when they should have claimed about 2, 500


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## Sarenco (28 Aug 2015)

Well, if a lender receives a payment from Revenue for the benefit of a borrower and that lender intentionally fails to credit that borrower's account with that payment - that's theft, not negligence.

I don't understand what you mean when you say "they claimed nothing off revenue in 2014".  It's not a lender's responsibility to claim any tax relief on behalf of a borrower - a lender is simply required to credit a borrower's account with the amount of TRS received or credited by Revenue.


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## Kerrigan (28 Aug 2015)

Thanks OP for starting this thread.

Thanks Raging Bull for bringing more light to this case.

I can confirm there is more of this going on than we know.  The reason I received for not receiving TRS was my lenders system was not compatible with Revenue format.  If anyone can translate that excuse feel free to do so because I'm sitting here scratching my head.


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## Kerrigan (28 Aug 2015)

Hi Sarenco, in my case I don't believe my provider received TRS and didn't apply it.to my two accounts. As far as what I understand they automatically stopped it over a missed repayment that I had and I am now finding it very difficult to reinstate TRS.   Revenue tell me I am due a refund but the lender keeps returning my file back to Revenue marked (error).  Why I do not know?


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## Sarenco (28 Aug 2015)

Kerrigan said:


> Hi Sarenco, in my case I don't believe my provider received TRS and didn't apply it.to my two accounts. As far as what I understand they automatically stopped it over a missed repayment that I had and I am now finding it very difficult to reinstate TRS.



Ah, understood.  

That's certainly frustrating but perhaps not as scandalous as the intentional withholding of TRS payments by a lender.

That actually sounds like a genuine case of two IT systems not "speaking to each other" properly.  You might consider escalating this issue to the bank's complaints dept if it doesn't get resolved quickly and ultimately making a complaint to the FSO.  You obviously shouldn't have to chase anybody to resolve this issue but if you don't, this may never get resolved.  Keep at it.


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## Sophrosyne (28 Aug 2015)

Kerrigan said:


> Thanks OP for starting this thread.
> 
> Thanks Raging Bull for bringing more light to this case.
> 
> I can confirm there is more of this going on than we know.  The reason I received for not receiving TRS was my lenders system was not compatible with Revenue format.  If anyone can translate that excuse feel free to do so because I'm sitting here scratching my head.


 
Did you report this to Revenue?


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## Sophrosyne (28 Aug 2015)

Sarenco said:


> Ah, understood.
> 
> That actually sounds like a genuine case of two IT systems not "speaking to each other" properly.  You might consider escalating this issue to the bank's complaints dept if it doesn't get resolved quickly and ultimately making a complaint to the FSO.  You obviously shouldn't have to chase anybody to resolve this issue but if you don't, this may never get resolved.  Keep at it.


 

Perhaps it is a systems compatibility issue; and perhaps not.

See Complaint 20., page 55, to the FSO

“The Complainant contended that the Bank had misinterpreted how the Tax Relief at Source should be applied to his account.”

*The complaint was not upheld.*

Then see comments by cold case reviewer, Harold A. Whelehan, S.C.

“In this case, while the Finding went against the Complainant, there was no follow-up enquiry with the Complainant or with the Revenue as to whether his contention could be correct as to the alleged misinterpretation or mis-application of the Revenue provisions by the Respondent. It appears that he could have been invited to procure evidence from the identified official to whom he spoke which could have been obtained either through the Complainant or through the Bank and also the question of the information disclosed on the Bank’s website could, and perhaps should have been investigated, in order to specifically deal with the Complainant’s allegations.


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## Sarenco (29 Aug 2015)

Sophrosyne said:


> Perhaps it is a systems compatibility issue; and perhaps not.
> .



For sure.  

Lenders certainly should be treating taxpayers' money with the utmost of care and systems issues are no excuse for denying anybody a relief to which they are legally entitled for any longer than is absolutely necessary.  

However, there's a world of difference between an organisation struggling to get their systems in order (or not putting sufficient resources in place to sort issues out in a prompt fashion) and a deliberate or conscious attempt to misappropriate funds, which appeared to be the original suggestion.


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## Sophrosyne (29 Aug 2015)

Sarenco said:


> For sure.
> 
> Lenders certainly should be treating taxpayers' money with the utmost of care and systems issues are no excuse for denying anybody a relief to which they are legally entitled for any longer than is absolutely necessary.
> 
> However, there's a world of difference between an organisation struggling to get their systems in order (or not putting sufficient resources in place to sort issues out in a prompt fashion) and a deliberate or conscious attempt to misappropriate funds, which appeared to be the original suggestion.


 
The FSO case suggests misinterpretation rather than a "struggling" IT issue.


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## Sarenco (29 Aug 2015)

Not sure how you are reading that from Harry Whelan's report but whether it's an IT issue or not there's an onus on the bank and/or Revenue to sort it out ASAP.


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## Kerrigan (29 Aug 2015)

I have it in writing that I am not the only customer who has had this issue.  After my second or third contact with the Revenue I found the tone slightly peeved off with me; as if I was pestering them. 

On another note are unemployed people entitled to TRS even if they are paying their mortgage?


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## Sarenco (29 Aug 2015)

Employment status is not relevant - all that matters is whether a borrower is making interest payments on a qualifying home loan.

Could you give us some more details on your own case?  How long has this been going on, etc?


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## Kerrigan (29 Aug 2015)

Some months ago I seen my mortgage rise by approximately €300.00 per month I thought it was interest rate fluctuations. I contacted my bank and I was informed the variable rate had not changed. I was busy with work and I never got a proper chance to investigate the matter further. Each month went by and the mortgage would slightly rise again by a few Euro. I contacted the bank again and was informed that no trs was applied to the account as I had missed a mortgage repayment and in lieu trs ceased. When I noted this error I immediately cleared the debt and reapplied for trs. It has been some months and trs has not been applied to my main mortgage and a top loan I have. I went into discussions with the bank and was informed that yes they had received my file from the revenue but returned it marked (error) and said their system was not compatible and the revenue will need to resend instructions in a different format. This will take another couple of months.

I sit here on a variable 4.4 repaying over 2k per month with no trs and no way of moving my mortgage. I am mortgage product illiterate and pray this campaign for Variable Rate Customers gets a just hearing.


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## Sarenco (29 Aug 2015)

I think at this stage you should make a formal complaint to the bank and, if necessary, escalate to the FSO.  You are legally entitled to this relief and the bank don't appear to be dealing with this problem with any sense of urgency.

Here's a guide to making formal complaints that may be of some assistance:-

http://www.consumerhelp.ie/financial-complaints

I'm surprised this issue hasn't received any media attention - I'm sure you are not the only borrower with this problem.

Good luck.


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## Raging Bull (29 Aug 2015)

Tens of thousands likely affected but true number depends on policy of each banksome may be applying partial relief correctly


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## Sarenco (29 Aug 2015)

Raging Bull said:


> Tens of thousands likely affected but true number depends on policy of each banksome may be applying partial relief correctly



Kerrigan's problem pretty clearly relates to a lack of urgency on the part of the bank to resolve an IT issue.

You appear to be alleging something else but your actual complaint is not clear to me.  Could you spell it out for us?


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## Raging Bull (29 Aug 2015)

The bank won't give me relief im legally due


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## Sarenco (29 Aug 2015)

Have they given you any reason why?  Has Revenue confirmed that they have issued the appropriate file to your lender?  Are you making full or partial repayments?


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## Kerrigan (29 Aug 2015)

I too would like to hear the reason you received Raging Bull.

In my own case the Revenue confirmed they had issued the appropriate file to my lender but my lenders IT system doesn't like the Revenue's format. 

When I first contacted Revenue and they asked me was I repaying full capital and interest and had no arrears because they said no TRS will be applied to a mortgage that is not repaid in full each month.  I informed them I repaid my two mortgages in full each month.  Only when I said this did they then agree they would send my file to my lender.

I was also informed by the Revenue that my lender should issue me with a refund.

Yes, I agree I need to make a formal complaint to the lender and then to the FSO.


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## Raging Bull (29 Aug 2015)

no reason really was provided other than their interpretation is correct,,, mine were partial payments.,, revenue agreed partial payments qualify for relief


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## Sarenco (29 Aug 2015)

Ok, so you're making partial payments of the qualifying interest due and your bank is refusing to credit your account with reduced TRS payments to reflect the actual interest paid.  Is that correct?

I don't think there is any doubt that reduced qualifying interest payments qualify for reduced TRS - is your bank suggesting otherwise?  

Or is it simply the case that your bank are saying that they will only credit your account on an annual basis for qualifying interest actually paid in that year?


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## Kerrigan (29 Aug 2015)

Sarenco said:


> I don't think there is any doubt that reduced qualifying interest payments qualify for reduced TRS - is your bank suggesting otherwise?



I cannot speak for Raging Bull but this is what both revenue and some banks are suggesting.  I informed the revenue I was paying full payment every month and the civil servant I spoke with clearly stated that you would not be entitled to any TRS if you weren't repaying the full amount.  There are supposedly new rules in place suggesting this.


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## Sophrosyne (30 Aug 2015)

Your problem appears to differ from that of Raging Bull.

It is important that the two are not confused.



Kerrigan said:


> Revenue confirmed they had issued the appropriate file to my lender but my lenders IT system doesn't like the Revenue's format.
> 
> When I first contacted Revenue and they asked me was I repaying full capital and interest and had no arrears because they said no TRS will be applied to a mortgage that is not repaid in full each month.  I informed them I repaid my two mortgages in full each month.  Only when I said this did they then agree they would send my file to my lender.
> 
> I was also informed by the Revenue that my lender should issue me with a refund.


 
If I am reading your posts correctly, in your case, your bank accepts that you are entitled to TRS but cannot apply it due to an IT systems incompatibility issue.

However, Raging Bull's problem does not involve IT issues.

In his case, his bank does not accept that he is entitled to TRS due to what he feels is a misinterpretation of TCA 1997 s 244 (TRS) and which is contrary to Revenue guidelines.


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## PatrickJ (1 Sep 2015)

I have been dealing with the same individual in the Revenue regarding my procurement with obtaining TRS; even when I was out of work I always paid at least interest only.  TRS stopped and I was informed by this individual that I was not able to receive TRS because I was repaying interest + capital and wouldn't receive TRS until I either cleared my arrears or my provider recapitalized them.  My provider did recapitalize the arrears but TRS was still not applied.  I am in the same boat as kerrigan whereas the lenders computer system is not in sync with the Revenue's hence not being able to obtain TRS. 

What if a mortgage holders payment is paid at a later date but still paid within the same month - does this disqualify them from TRS.


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## Sophrosyne (1 Sep 2015)

PatrickJ said:


> I have been dealing with the same individual in the Revenue regarding my procurement with obtaining TRS; even when I was out of work I always paid at least interest only.  TRS stopped and I was informed by this individual that I was not able to receive TRS because I was repaying interest + capital and wouldn't receive TRS until I either cleared my arrears or my provider recapitalized them.  My provider did recapitalize the arrears but TRS was still not applied.  I am in the same boat as kerrigan whereas the lenders computer system is not in sync with the Revenue's hence not being able to obtain TRS.
> 
> What if a mortgage holders payment is paid at a later date but still paid within the same month - does this disqualify them from TRS.


 
If as you say, you have always paid interest, then there would have been no reason for the TSR to have ceased. See Revenue Guidelines quoted below.

Did you miss any payments?


*“What is changing?*
With effect from January 2014, Revenue has instructed all Lenders to only pay TRS on the actual interest paid to a mortgage account.

*How will this impact on borrowers paying full interest but no capital each month?*
Where a borrower pays the interest portion in full this change will have no impact.

*How will this impact on borrowers who make partial payment each month?*
Where borrowers only make a partial payment the amount of TRS granted will be reduced to reflect the actual amount of interest paid.

*How will this change impact on borrowers that miss occasional payments? For example will they have to reapply for TRS each time that payments recommence?*
Where a borrower is eligible for TRS the account ‘re-qualifies’ for mortgage interest relief once payments have resumed. However, depending on how the Lender has implemented the change to interest paid, the borrower may not immediately receive the TRS credit on resumption of the mortgage payment. While there may be a delay, the borrower will receive the TRS based on the amount of interest paid subject to applicable ceilings and rates.”


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## PatrickJ (1 Sep 2015)

Hi,

I accumulated arrears because I was unable at that time to meet my full repayment.  I had no agreement in place with the lender hence the arrears.

However, lets say my payment was due on the 1st day of each month I paid the interest only on the 10th day of the month.  Not good I know but at that time I just hadn't got the money.

Thank you very much for your interest and time giving on this thread; it's been very helpful.


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## Sophrosyne (1 Sep 2015)

I think that because you paid the interest later in the month than the due date, your lender (or your lender’s IT system) may have regarded these as missed payments, which appears to be why TRS was discontinued.

There would obviously, be a delay before TRS is resumed.

When did you resume making interest payments on the due date each month?


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## PatrickJ (3 Sep 2015)

Approximately four months ago.

Do you think I would eligible for an TRS rebate for all the payments I did make considering they were a few days late?


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## Sophrosyne (3 Sep 2015)

PatrickJ said:


> Approximately four months ago.
> 
> Do you think I would eligible for an TRS rebate for all the payments I did make considering they were a few days late?


 
Yes you would be entitled to a refund, either from your lender or if not, then from Revenue by end-of-year review.

TRS should have been applied from the time you resumed interest payments on the due dates.

While there might be a delay in restoring TRS, a four-month delay is unacceptable, even if it is an IT problem.

Can you tell us the name of your bank and also which Revenue section you contacted in this matter?


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## PatrickJ (4 Sep 2015)

The bank (company) is Acc loan management and it was a section dedicated to TRS that I spoke with in the Revenue.  This is why I'm pretty surprised by the information I've received on this thread because its completely in contrast with that of what the Revenue told me.


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## Sophrosyne (5 Sep 2015)

PatrickJ said:


> it was a section dedicated to TRS that I spoke with in the Revenue.  This is why I'm pretty surprised by the information I've received on this thread because its completely in contrast with that of what the Revenue told me.


 
I am not clear about what you were advised by TRS section, perhaps you would elaborate.

Did you explain that you always paid interest, albeit on occasion later than the due date?

I cannot see why it would be necessary for you to clear your mortgage arrears or have them recapitalized in order to be entitled to mortgage interest relief on the interest you _did_ pay.


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## PatrickJ (7 Sep 2015)

Revenue clearly stated that my arrears needed to be cleared either in full or recapitalized by the bank.  I remember thinking at the time that this was unfair but with it being Revenue you'd think they'd be correct and of course I didn't challenge them on it. 

I formed them I was always paying interest only but they still said you are not eligible until arrears are cleared in whatever format possible.

I will write to my lender today and ask them for a refund and see what they have to say for themselves.


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## Sophrosyne (7 Sep 2015)

PatrickJ said:


> Revenue clearly stated that my arrears needed to be cleared either in full or recapitalized by the bank.  I remember thinking at the time that this was unfair but with it being Revenue you'd think they'd be correct and of course I didn't challenge them on it.


 
If it were me, I would also request a written explanation of this from Revenue.


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## Kerrigan (7 Sep 2015)

I received correspondence from the lender today saying it will be October before TRS is applied.  There was no mention of a refund for the months I did not receive it.  I will chase this up and update the thread when I hear more.


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## Sophrosyne (7 Sep 2015)

Banks appear to be using a two-month look back when applying TRS.

For instance, if you miss a payment in July then TRS will cease in September.

However, if you catch up, TRS should resume 2 months after the catch up date and any outstanding TRS due should then be applied.


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