Do you get TRS on missed payments?

TRS To Be Withdrawn If You Are 6+ Months In Arrears

Revenue are telling banks not to pay/allocate mortgage interest relief (TRS) against mortgages that are more than 6 months in arrears.

I heard this in the paper reviews this morning (10th ... Newstalk & RTE). Charlie Weston, probably in the indo .... Nothing on revenue.ie

Does anyone know more
 
It's not 6 months in arrears - it's 6 months of NO repayments according to the Indo:

http://www.independent.ie/business/...it-mortgages-suffer-new-tax-blow-3320177.html

A spokeswoman for the Revenue Commissioners told the Irish Independent that where no payments have been made on a mortgage for six months or more the taxman has now ordered that the valuable mortgage tax relief be removed.
"Where no payments have been made for six months, the relief is ceased," the spokeswoman said.
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I believe that it was mis-reported as 6 months of arrears on RTÉ Radio this morning too. I heard this and got a bit worried for some people I know who are in arrears but who are still making reduced repayments.

6 months of no repayments at all is probably strong evidence of an unsustainable mortgage so giving tax relief is arguably a waste. In any case if no interest is being paid then it's difficult to see how/why interest tax relief should be provided.

Update: Brendan's earlier post and this Revenue FAQ suggests that there is nothing new here in terms of Revenue's policy on granting mortgage interest tax relief in spite of the media's shock horror reporting....

How do I re-apply for mortgage interest relief if the relief was ceased because I made no mortgage payments but now have re-commenced payments?

An account will re-qualify for mortgage interest relief once three consecutive mortgage payments have been made. You must then complete a new online application.
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I read with interest Charlie Weston in the Independent.

This is one of these matters where I think Revenue is simply wrong.

Logically - if you pay your mortgage out of an already overdrawn account then, you are 'not' paying the interest either.

If folk think this is 'different' then all the Banks should is debit the interest as before..to the mortgage account...

Then CREDIT Mortgage Account DEBIT Current A/c
Then DEBIT Mortgage Account CREDIT Current A/c

..and its on all fours with a payment out of an overdraft.

All we need is to get a refusal from Revenue for a taxpayer- then Appeal Commissioners (who often side with Revenue) and a Circuit Court case.

They have lost a previous dividend cash with the same wish washy arguments.

Are people afraid of these folk?
 
I don't really understand your post to be honest.

But my main point is that there seems to be nothing new here regardless of the Indo report. Unless the policy of stopping TRS when NO repayments were made for 6 months was not actually applied before and Revenue are only going to start enforcing it now?

And some of the reporting seems to be totally inaccurate - e.g. it's not people who are in 6 months of arrears who need worry but those who have made NO repayments for 6 months.
 
ClubMan said:
But my main point is that there seems to be nothing new here regardless of the Indo report. Unless the policy of stopping TRS when NO repayments were made for 6 months was not actually applied before and Revenue are only going to start enforcing it now?
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Hi ClubMan

That is it. This was not enforced but since October, the banks have been told to enforce it.
 
I has in front of me a mortgage statement for a house where no repayments have been made for over 3 years yet each month the bank is collecting their TRS.
 
Time said:
I has in front of me a mortgage statement for a house where no repayments have been made for over 3 years yet each month the bank is collecting their TRS.
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A very good point!

Who is losing out by this decision?

The borrower owes more if they don't get the TRS.

But if they are going to default anyway, it is the bank which stands to lose.

Brendan
 
Brendan Burgess said:
Who is losing out by this decision?
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Taxpayers? I take it that the bank are collecting the TRS paid by Revenue to the borrower to at least recoup that amount of interest on the loan? I presume (and hope!) that a mortgage with no repayments at all (other than via TRS?) for three years and which has not moved on to some other stage such as repossession is an uncommon case...?
 
It is a subprime lender that has had their latest attempts at repossessions shot down by the high court.

The person has told me that they have not had any movement by the lender in at least the last 2 years. He is trying to get a letter of unsustainability from them so he can apply for social housing. Not a peep from them.
 
I see. Unusual circumstances so I guess? Still seems odd that TRS is being paid. Maybe that will stop now under this alleged new line from Revenue on stopping TRS when no repayments have been made for more than 6 months? Also seems odd that the borrower is not paying anything at all - even a token repayment. I thought that making some sort of repayment would be better than nothing especially if/when it comes to the borrower being chased for the debt, court proceedings etc.?

Anyway - that's sort of veering off topic I guess...
 
He has not paid a red cent in over 3 years, he wants the bank to take the house but the bank are not biting.
 
Time said:
He has not paid a red cent in over 3 years, he wants the bank to take the house but the bank are not biting.
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Surely he's digging a hole for himself as if/when they do take it he will still owe the outstanding balance - including any accrued/capitalised interest/arrears? And if/when the lender chases the debt through the courts isn't it likely that a judge might take a dim view of him not making even token repayments along the way?
 
He does not care a bit.

On social welfare, living in council housing they won't see a cent.
 
Time said:
He does not care a bit.

On social welfare, living in council housing they won't see a cent.
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Well if the lender chases any outstanding debt through the courts he could well end up having to pay something or face the consequences.
 
Really? My client is a bankrupt. They will never see a penny and what can they do? Cry over spilt milk?
 
I had emailed Revenue some time ago on this, and have just got an official reply:

From its introduction in 2002 mortgage interest relief at source has been calculated on either interest paid or interest charged basis, depending on the lenders various IT infrastructures. The use of the interest charged basis was facilitated because its usage had minimal impact on the overall amount of relief granted, as the level of mortgage arrears was low. However, as a safeguard mechanism, where cumulative mortgage arrears existed for over 18 months, there was and continues to be a specific requirement on lenders to notify Revenue of the particular circumstances to allow a determination be made as to continued eligibility or otherwise on a case by case basis.

In addition lenders are also required to report cases where no payments have been made for a 6-month period to allow Revenue determine continued eligibility to the relief on an individual basis. Revenue takes a prudent approach and lenders are not required to report details of mortgage arrears to Revenue until there are cumulative mortgage arrears over a period. In such cases, lenders are required to provide information regarding the precise nature of the arrear such as whether the customer is making interest payments and if so, the amount so that a determination can be made on continuing eligibility. Each case is considered on its individual merits before a decision is made on the appropriateness of continued mortgage interest relief on a particular mortgage account. In light of increasing non payment, or arrears of mortgage repayments and to protect the Exchequer against any over issue of the relief where clearly eligibility no longer exists, Revenue advised lenders in October that relief should be calculated by the interest paid method only.
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Are Revenue going to audit banks where they continued to claim TRS unlawfully?
 
Brendan Burgess said:
I had emailed Revenue some time ago on this, and have just got an official reply:
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Just to be pedantic (ahem!) is the word "capital" below implied or something? If not then the underlined bit is presumably moot since if they are making interest only repayments then obviously they are not making "no repayments".
In addition lenders are also required to report cases where no [capital?] payments have been made for a 6-month period to allow Revenue determine continued eligibility to the relief on an individual basis.

...

In such cases, lenders are required to provide information regarding the precise nature of the arrear such as whether the customer is making interest payments
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