What with tax cuts, VAT reduction, etc. Remember M.I.R.A.S?
Discussion
Does anyone recall how this worked, why it came about, and was it a good benefit? Why was it abolished in the end?
Surely this would be a great thing to bring back (if my understanding of it is correct); it would be a benefit to those that 'pay their way' have mortgages and pay income tax. It would not be a benefit to those that don't work and don't have mortgages. Would it not stimulate the housing market and the economy?
Why not do this instead of reducing VAT by a nominal amount and silly '1p off current rate' type income tax cuts?
ETA: I've looked on HMRC, but they don't give a lot of detail http://www.hmrc.gov.uk/manuals/REManual/re500.htm
Surely this would be a great thing to bring back (if my understanding of it is correct); it would be a benefit to those that 'pay their way' have mortgages and pay income tax. It would not be a benefit to those that don't work and don't have mortgages. Would it not stimulate the housing market and the economy?
Why not do this instead of reducing VAT by a nominal amount and silly '1p off current rate' type income tax cuts?
ETA: I've looked on HMRC, but they don't give a lot of detail http://www.hmrc.gov.uk/manuals/REManual/re500.htm
Edited by texasjohn on Sunday 23 November 12:31
Mortgage Income Relief At Source ...
It applied to my first mortgage in the mid 80s ... couldn't tell you who scrapped it though - was it this lot?
Guesss they scrapped it to make more money on the income tax side ...
Saved me a few bob in the early days from memory.
Edit: http://en.wikipedia.org/wiki/Mortgage_Interest_Rel...
Yes, it was this b
d lot ...
It applied to my first mortgage in the mid 80s ... couldn't tell you who scrapped it though - was it this lot?
Guesss they scrapped it to make more money on the income tax side ...
Saved me a few bob in the early days from memory.
Edit: http://en.wikipedia.org/wiki/Mortgage_Interest_Rel...
Yes, it was this b
d lot ...Edited by MikeyT on Sunday 23 November 12:39
http://www.ft.com/cms/s/0/fc487c9e-b83a-11dd-ac6d-...
This article seems to allude to the probability that it won't come back as a middle class perk. Tax increases to those that earn 40k plus is going to screw me even more.
This article seems to allude to the probability that it won't come back as a middle class perk. Tax increases to those that earn 40k plus is going to screw me even more.
MIRAS was only one version of the tax relief that was available to those who took out a mortgage to fund the purchase of their main residence. The basic original rule was that full tax relief was available on the interest charged on loans to buy your home.
Originally, the taxpayer had to make a separate claim for the tax relief and would consequently receive a tax refund or an amendment to their PAYE coding to "refund" the tax.
Later a system was introduced which gave automatic tax relief at source on each mortgage payment - but only at the Basic Rate of tax. Anyone who was a higher rate taxpayer still had to make an additional claim for tax relief at the higher rates.
Eventually, a number of restrictions were brought in, mainly by the Conservatives.
The first one was that the interest relief was limited to loan values of £30,000 or under - per property. Of course, if more than one person was involved in borrowing then the £30,000 was multiplied by the number of people borrowing to buy that one property.
Married couples were not allowed to combine the £30,000 limits but unmarried couples and everybody else could. This was deemed rather unfair so in 1989 the £30,000 became a property limit rather than a person limit - again a Conservative measure.
The next restriction was that the tax relief was only allowed to be applied to the basic rate of tax. No relief was available at the higher rate. That might have been a Conservative measure too.
When Gordon got to be Chancellor in 1997, he decided that the housing market was buoyant enough wiythout the Treasury subsidising it (how times have changed) so he decided that, as the relief was now so limited, that it could be abolished without taxpayers revolting.
He was correct in that assumption and the passing of mortgage tax relief went without anyone really noticing.
Originally, the taxpayer had to make a separate claim for the tax relief and would consequently receive a tax refund or an amendment to their PAYE coding to "refund" the tax.
Later a system was introduced which gave automatic tax relief at source on each mortgage payment - but only at the Basic Rate of tax. Anyone who was a higher rate taxpayer still had to make an additional claim for tax relief at the higher rates.
Eventually, a number of restrictions were brought in, mainly by the Conservatives.
The first one was that the interest relief was limited to loan values of £30,000 or under - per property. Of course, if more than one person was involved in borrowing then the £30,000 was multiplied by the number of people borrowing to buy that one property.
Married couples were not allowed to combine the £30,000 limits but unmarried couples and everybody else could. This was deemed rather unfair so in 1989 the £30,000 became a property limit rather than a person limit - again a Conservative measure.
The next restriction was that the tax relief was only allowed to be applied to the basic rate of tax. No relief was available at the higher rate. That might have been a Conservative measure too.
When Gordon got to be Chancellor in 1997, he decided that the housing market was buoyant enough wiythout the Treasury subsidising it (how times have changed) so he decided that, as the relief was now so limited, that it could be abolished without taxpayers revolting.
He was correct in that assumption and the passing of mortgage tax relief went without anyone really noticing.
Eric Mc said:
You are mistaken. It wasn't the complete abolotion of MIRAS that prompted the mad rush to buy in 1989 - but the amendement to the £30,000 threshold rules.
Indeed. Nigel Lawson's Big Cock Up. He announced in March 1988 that cohabiting couples could no longer each claim £30,000 worth of Miras ( the average first-time buyer property price was £40,000). But he postponed the amendment for six months. House prices soared, as couples rushed to move in together and claim £30,000 each before the deadline. A few years later it all ended in tears when interest rates went to 10 per cent, house prices crashed and couples who joined together in holy greed found themselves in negative equity and stuck in the same house they couldn't sell as it wouldn't cover their mortgage.Edited by audidoody on Monday 24th November 22:48
Gassing Station | The Pie & Piston Archive | Top of Page | What's New | My Stuff