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Mortgage Interest Relief TRS overpayment

  • 08-09-2016 7:41pm
    #1
    Shurwhynot
    Registered Users, Registered Users 2 Posts: 561 ✭✭✭


    Got a letter today from Revenue saying that I owe them €14,500 due to being overpaid my mortgage interest relief! I bought the house in 2006, and moved abroad in July 2011 and rented the house out. Revenue are looking for repayments as far back as 2009 which surely can't be right?

    How would this have come to light first of all? I don't recall anyone telling me I had to inform them that I was leaving the house, but would the fact that I went abroad mean anything?

    What do I do?


Comments

  • #2
    bee06
    Registered Users, Registered Users 2 Posts: 4,514 ✭✭✭bee06


    Mortgage interest relief only applies if you are living in the property. As soon as you moved out (doesn't matter to where) you weren't entitled to it and should have contacted them to stop it.

    If you have rented the property out now are you paying tax on the income?


  • #3
    Lockedout2
    Registered Users, Registered Users 2 Posts: 402 ✭✭Lockedout2


    Shurwhynot wrote: »
    Got a letter today from Revenue saying that I owe them €14,500 due to being overpaid my mortgage interest relief! I bought the house in 2006, and moved abroad in July 2011 and rented the house out. Revenue are looking for repayments as far back as 2009 which surely can't be right?

    How would this have come to light first of all? I don't recall anyone telling me I had to inform them that I was leaving the house, but would the fact that I went abroad mean anything?

    What do I do?

    You rented out the house! Did you file tax returns with the Revenue?

    Did you register the tenants with the PRTB?

    You are only entitled to TRS if you are living in the house so you should have informed your bank.


  • #4
    intheclouds
    Closed Accounts Posts: 3,175 ✭✭✭intheclouds


    Were you paying tax (or filing tax returns) on the rental income? Were you paying nppr then property tax? All it takes is them to cross reference that data against the mortgage interest relief.


  • #5
    Shurwhynot
    Registered Users, Registered Users 2 Posts: 561 ✭✭✭Shurwhynot


    Paying tax on everything else yes but didn't contact the Revenue regarding the TRS as I was oblivious to this to be honest. I assume I don't have any liability for 2009-2011?


  • #6
    Squatter
    Closed Accounts Posts: 1,841 ✭✭✭Squatter


    Shurwhynot wrote: »

    Revenue are looking for repayments as far back as 2009 which surely can't be right?

    That would depend on when you left the house. If you can show them that you were in it until 2011 when you emigrated, then they will revise the demand.

    From Revenue's perspective, you claimed a relief to which you weren't entitled for a number of years so you are liable to repay it (plus possibly interest and penalties).

    Their Customer Charter makes things clear:-

    Presumption of Honesty

    You can expect:

    to be treated as honest in your dealings with Revenue unless there is clear reason to believe otherwise and subject to Revenue's responsibility for ensuring compliance with tax and customs law.

    We expect you:

    to deal in an honest way with Revenue by returning the tax and duty which you are due to pay and seeking only those entitlements and tax credits to which you are due.


    Information and Assistance

    You can expect:

    to be given the necessary information and all reasonable assistance to enable you to clearly understand and meet your tax and customs obligations and to claim your entitlements and tax credits.

    We expect you:

    to provide true and correct information in all your contacts with Revenue and to advise Revenue in a timely manner of developments (such as change of address, commencement or cessation of business) that are relevant to your tax and customs affairs.


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  • #7
    CIARAN_BOYLE
    Registered Users, Registered Users 2 Posts: 14,599 ✭✭✭✭CIARAN_BOYLE


    Shurwhynot wrote: »
    Paying tax on everything else yes but didn't contact the Revenue regarding the TRS as I was oblivious to this to be honest. I assume I don't have any liability for 2009-2011?

    It may be worth refiling a number of years tax returns as the mortgage interest you claimed may be 75% of the post TRS deduction interest rather than 75% of the full refund. This may mitigate your liability. Talk to your accountant.


  • #8
    gerrybbadd
    Registered Users, Registered Users 2 Posts: 10,301 ✭✭✭✭gerrybbadd


    CIARAN_BOYLE wrote: »
    It may be worth refiling a number of years tax returns as the mortgage interest you claimed may be 75% of the post TRS deduction interest rather than 75% of the full refund. This may mitigate your liability. Talk to your accountant.

    The 75% deduction only counts though if you are registered with the PRTB. If you weren't, it's worth contacting them, and retrospectively registering. The cost of the registration is likely gonna be far less than the 75% deduction you can take for interest relief.


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