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A taxpayer has enquired about the tax treatment of refunds received due to floor clauses in their mortgage. The DGT has ruled that the principal amount and its associated interest do not form part of the taxable base; however, any deduction for the main residence applied incorrectly in non-prescribed tax years must be repaid.
Taxpayers receiving refunds for floor clauses will not pay income tax on the amount received, but must ensure that any tax relief previously claimed for their main residence is corrected for the relevant years.
The tax team reviews your specific situation.
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