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HMRC internal manual

Compliance Handbook

Interest: Repayment interest: Special provisions for start dates: Mortgage interest relief at source (MIRAS)

You must check whether, and from which date, the FA 2009 interest rules apply to the tax or duty you are dealing with. See CH140160 for full details.

Under the Mortgage Interest Relief at Source (MIRAS) provisions (ICTA88/S369), a qualifying borrower is permitted to deduct and retain an amount of tax from certain loan repayments. Under the provisions of FA1999, mortgage interest relief (MIR) and the Mortgage Interest Relief At Source (MIRAS) scheme were withdrawn from 6 April 2000. Relief for new loans to an elderly person to purchase a life annuity (normally referred to as home income plans) was withdrawn from 9 March 1999. However, existing home income plans continue to qualify for relief.

A special provision changes the repayment interest start date from the general rule, see CH146040, where the person makes a payment on a home income plan that existed before 9 March 1999 without making the deduction.

If the person makes a payment on such a home income plan without making a deduction, HMRC will refund an amount equal to the amount that could have been deducted.

The amount that is refunded attracts repayment interest .

The special provision provides that the repayment interest start date is 31 January next following the tax year in which the deduction could have been made. It is the interest payment mentioned in ICTA88/S375(8)(c).

See CH146340 for an example.