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IBOA No special treatment for staff loan

Friday, January 10 15:51:30

IBOA General Secretary, Larry Broderick, has strongly rejected suggestions that bank workers are treated any differently than ordinary customers regarding loans or in how the taxman treats those borrowings.

His comments come after recent media reports pointing out that many staff at financial institutions have home loans at preferential rates from their employers and that there is some kind of preferential tax treatment for this.

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.

Describing recent media reports as "amounting to a non-story" as far as the vast majority of bank workers are concerned, Mr. Broderick said that "the days are long gone when bank officials could expect to receive preferential rates on mortgages or other loans from the financial institution they work for".

"For the vast majority of bank workers, there is no preferential treatment aE" either in terms of the interest rates they pay or indeed in terms of their treatment by the lender if they get into difficulty in repaying their debts. The banks do not operate a policy of debt forgiveness for ordinary borrowers nor do they operate a policy of debt forgiveness for their own employees, aE" even in those institutions which actively encouraged employees to participate in investment projects being sponsored by the institution, itself," he said.

"A small number of long-serving staff may still be paying back loans or mortgages taken out many years ago on the preferential rates that were offered at that time. But with the application of taxation of benefits-in-kind by the Revenue Commissioners, the value of that particular perk has long since diminished. As for the tax implications of possible mortgage write-downs, it is worth noting that the responses from the Revenue Commissioners, quoted in the media, did not confirm that such write-downs have happened but simply outlined the actions the Revenue Commissioners would take if they were to occur. And, of course, in such circumstances, the Revenue Commissioners would be entirely justified in ensuring full compliance."