The Income Tax (Interest Relief) (Amendment) Regulations 1995

Explanatory Note

(This note is not part of the Regulations)

These Regulations make various amendments to the Income Tax (Interest Relief) Regulations 1982 (S.I. 1982/1236) (“the principal MIRASRegulations”) in connection with the administration of the mortgage interest relief at source (MIRAS) scheme. The amendments made by regulations 4 and 5 are in consequence of provisions contained in section 112 of the Finance Act 1995 (c. 4) relating to the recovery of certain amounts deducted by borrowers, or paid by the Board of Inland Revenue (“the Board”), under the MIRAS scheme.

Regulation 1 provides for citation, commencement and effect, and regulation 2 contains a definition.

Regulation 3 omits regulation 3(2) of the principal Regulations, thereby abolishing the requirement for a lender to send to the Board a copy of the statutory notice received from a borrower certifying that he meets the required conditions for the operation of MIRAS in connection with loan interest.

Regulation 4 inserts a new regulation 8B in the principal Regulations which enables the Board to recover by way of assessment amounts paid in certain circumstances to a borrower under the MIRAS scheme to which he is not entitled. The regulation also enables the Board in such cases to impose penalties for any false statement made fraudulently or negligently by the borrower in connection with the payment of such amounts, or for unreasonable delay on the part of the borrower in notifying the Board that interest on a loan has ceased to qualify for MIRAS.

Regulation 5 makes necessary amendments to regulation 19 of the principal Regulations as a result of the insertion by section 112 of the Finance Act 1995 of a new provision (section 374A) in the Income and Corporation Taxes Act 1988 which enables the Board to recover amounts deducted under the MIRAS scheme that should not have been deducted.