Some bank staff facing tax bill on mortgage writedowns

Thursday 09 January 2014 23.43
Some bank workers who get a portion of their mortgage debt written off are now facing a tax bill
Some bank workers who get a portion of their mortgage debt written off are now facing a tax bill

Some bank workers who get a portion of their mortgage debt written off are facing a tax bill from the Revenue Commissioners, RTÉ News has learned. 

The development has arisen because many staff at financial institutions have home loans at preferential rates from their employers which currently incur tax.  

However when their mortgages fall into arrears and some of their debts are written off, Revenue wants the bank workers to pay tax in relation to the amount being written off.

A spokesperson for the Revenue Commissioners said if a bank worker gets a portion of their loans written down, there would be a tax liability. 

However, she added if a bank worker got the same deal on their mortgage restructuring as an ordinary customer no tax would apply. 

"Again, Revenue will look at the write-downs on a case by case basis to determine if they are subject to income tax," the spokesperson said.
 
The development affects bank workers who were on loans on preferential rates which they cannot now repay.