TRS overpayment

F

Fallonben

Registered User
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My ex partner and I bought a house in 2006 for which we both qualified for TRS credit. We split up in 2007 and he moved out of the property. Neither of us informed the TRS section of Revenue that he had moved out as we genuinely were not aware that we had to do so. In 2008, he applied to Revenue for rent relief on a property that he was sharing, but was informed by Revenue that he did not qualify for rent relief as he was receiving TRS on the property for which his name is on the mortgage. We then both received a letter from the TRS section in Revenue last week (July 2014), informing us that there is an overpayment of TRS for 2007-2013 of just under €9,000 as my ex-partner had not de-registered for TRS from the property when he was moving out in 2007. I wrote to Revenue to clarify if the overpayment was just in respect of my ex, and was told that no, the overpayment relates to us both as we are both liable as we are both listed on the loan.

We would both understand if the overpayment was only in relation to my ex, as although we had no idea that we had to inform Revenue of his leaving the property, we accept that an overpayment is owed to Revenue. However we cannot understand how I am also liable for the TRS that was granted to me for that period as I was still living (and still am living) in the property.

Has anyone had a similar experience as I really don't know where to seek advice regarding this. Revenue have given us a payment due date of 2 weeks from when they sent the overpayment letter to us!!!

Thanks for reading.
 
Hi Fallonben

I can recommended a tax advisor and accountant that I went to when I was lodging overdue rental income tax returns to the Revenue. He worked in the Revenue for 12 years. His bill was quite reasonable too.

I can PM this onto you if you wish? As I don't think I am allowed to post it publicly on this forum
 
This is interesting, are revenue saying that the 9k is your total TRS during that date or half the TRS which your partner claimed ? I cant remember the rates but it sounds like revenue are asking for it all back in repect of both of you or they are fining you on top.
 
Hi elcato,

They're asking for it all back for both of us, which I don't understand as surely I'm still entitled to the TRS as I remained resident in the property? We can accept our mistake regarding the overpayment for my ex, and we're willing to pay half the amount, but we can't understand why both TRS credit needs to be repayed? The latest correspondence stated:

Please be advised that in the case of a loan in joint names both borrowers are liable for the overpayment. The figure of €8824.49 is an overpayment based on both yourself and _______ living in the property from 2007 to 2013. There is an obligation on each taxpayer claiming TRS to inform the TRS section of any change of circumstance in relation to their account. If either party are leaving the principal private residence they are required to de-register, or contact the section directly. As this was not carried out at the time ______ left the property an overpayment has now occurred.
 
Fallon you can calculate whether this is the correct figure or not yourself. You know the way the bank sends you a summary of your mortgage and interest paid every year? You need to dig those out for the years 2007-2013 and look at each year individually. If you google 'TRS rates 2009' the first one on the list is a Revenue document, that gives you the rates for 2007, 2008 + 2009.
The rules were changed in 2009 so you can find the rates for 2010 + 2011 here: [broken link removed]
You can get the rates for 2012 and 2013 here: http://www.revenue.ie/en/tax/it/reliefs/tax-relief-source-mortgage-rates.html
Basically you need to put together a table with all the years 2006-2013 as the first column. Then next column write out which year of your mortgage each of those years was so 2007 was yr2, 2008 was yr 3 etc.
Then you see how much actual interest was paid on your mortgage for each of those years (from the bank statements).
Then you see how much TRS you were entitled to for those years.
Assuming ye weren't married and ye were both first time buyers these would be the rates:
2007 (yr 2) you were each entitled to 20% (8000)
2008 (yr 3) you were each entitled to 20% (10000)
2009 (yr 4) you were each entitled to 22.5% (10000)
2010 (yr 5) you were each entitled to 22.5% (10000)
2011 (yr 6) you were each entitled to 20% (10000)
2012 (yr 7) you were each entitled to 30% (10000)
2013 (yr 8) you were each entitled to 30% (3000)
For all of those years, because your ex didn't deregister, ye were getting double TRS relief i.e. double the figures shown in my list here.
So if in 2007 the TRS you were given was 20% (8000) + 20%(8000) = 3200. But because you lived there on your own you were only entitled to 20% (8000) = 1600 so the refund you owe the Rev for that year is: 3200 - 1600 = 1600
However this is only the case if the interest paid on your mortgage in 2007 exceeded 16,000 (8000+8000). As it was the first year of your mortage, it probably did.
The TRS you were given in 2008 was 20% (10000) + 20% (10000) = 4000. However you should have only got half that so you owe the Rev 2000 for that year. This is only the case if the total interest paid on your mortgage in 2008 exceeded 20,000 (10000+10000)
As the years go on, the interest on your morgage falls and so for e.g. 2012 the TRS you were given was 30%(10000) + 30%(10000) = 6000, but you would have only got that if the interest on your mortgage for 2012 exceeded 20000 (10000+10000) which it probably didn't. So the TRS you actually got was 30%(the actual interest) when what you should have got was 30%(10000).
So the refund for 2012 you owe the Rev will be 30%(the actual interest) - 30% (10000).
Do you get me? All you need is the interest figures for each year and using the rates above you can calculate what you owe the Rev.
From a quick glance, their figure of about 9grand looks about right to me. Considering the amount you would owe if ye had been given the full TRS entitlement every year would be 14,000 but it's obviously not that high because in the last few years the mortgage interest wouldn't have reached the double TRS ceilings. So 9 grand sounds about right but definitely check it out in a spreadsheet.
Also - you owe this money to the Rev, not your boyfriend. Basically since 2007 you've been paying a reduced mortgage based on claiming that he was still living in the house. He wasn't and therefore your mortgage should have gone up since 2007. So unfortunately it's you that owes this money to the Rev (assuming you've been paying the full mortgage since 2007 that is !!)
 
So they seem to confirm that if you had any relief from 2007 it was null and void given that the circumstances changed and you didn't inform them. Maybe that's how they deal with it rather than via a fine (Not suggesting that you should be fined btw). Did he contribute to the mortgage in this time ? If he did then he benifited as well so should pay half but of course this could be difficult. I'm presuming the demand is in both your names.
 
No in my figures it's only her ex's part of the TRS that the Rev are looking to get back. The 9 grand roughly matches her ex's half of the Trs for the period claimed according to my figures (but only she can calculate the actual figure owed as one needs the actual mortgage interest paid per yr to calculate the amount owed back)
 
Lucuma, thanks for taking the time to put together so much information for me. I will dig out my mortgage interest figures paid for 2007-2013 and take your calculations from there. I really hope you're wrong, but everything you posted makes complete sense so I have a horrible suspicion I may be trying to find €9,000 asap

I will let you know how I get on, thank you again!
 
But the amount is in respect to your ex. Was he paying during that time or have you come to an arrangement that you take over the payments and get to keep the house ? If it was his contribution then the bill is his.
 

You're welcome. I learned my TRS lessons the hard way! It's always when you apply for some benefit that you get caught for these things like the Rent Relief in your BF's case. In my case I found out when there was only 1-2 years of liability so I paid it, and removed her name from the TRS. I don't know why your ex-boyfriend's name wasn't removed from your TRS considering he's known about it since 2008?
Is his name removed now from the TRS?
Regarding the 9 grand, I'm sure Revenue would be open to some sort of payment plan. They know most people aren't going to have 9 grand lying around, I suggest engage with them and ask them if you can pay it off in installments.
 
Lucuma & elcato, apologies for taking so long to update you on the situation you kindly gave me help with.

My ex's name is now removed from the TRS. I married in 2012 so Revenue have reduced the bill by 1200 to account for my husband being eligible for TRS also. Lucuma, I calculated the figures myself based on my mortgage interest relief statements, and you were absolutely right, the figures was correct and in relation to my ex only. That said, we are both liable as the mortgage is still in both of our names. Why TRS continued to be paid for him after his phonecall to Revenue in 2009 to apply for rent relief remains a mystery. Revenue maintain that there was no obligation on the rent relief section to inform the TRS section of his phone call to state that he was no longer living in the property and therefore was applying for rent relief. They also can't answer why the rent relief section didn't tell him that he needed to de-register for TRS. Citizens Advice told me that it's something that we should follow up on as they are the same Government agency, but I'm not sure what the point would be?

Anyway, thank you both again, I have to now put together a proposed repayment plan for Revenue as we won't have the money they're looking for before the 2 week deadline that they have given us.
 
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