Q&A:Q The Revenue Commissioners have turned down my request for tax relief on registration fees, claiming that relief is only allowed on tuition fees. Is this correct?
Eamon Kearney, e-mail
A Apparently so. I thought I had unearthed a loophole that would allow you to claim relief on your registration charge but the Revenue has kindly pointed me to that bible of taxation, the Taxes Consolidation Act 1997, section 473a.
This is the section dealing with income tax relief on third-level college fees and it states, among other things, that "qualifying fees" means the amount of fees chargeable "in respect of tuition to be provided in relation to that course in that year".
The Revenue interpretation is strict. The Act mentions only "tuition fees" and therefore no other associated costs are covered, including registration fees. The Revenue's Leaflet IT31 Tax Relief for Tuition Fees states explicitly: "Relief is not available in respect of:
any part of the tuition fees that are or will be met directly or indirectly by grants, scholarships, by an employer or otherwise;
administration, registration or examination fees."
Q While abroad recently, I read an article on multi-currency mortgages - ie, converting your euro-denominated mortgage into Japanese yen or Swiss francs whose interest rate is lower and, therefore, paying off more principal than interest would reduce your mortgage considerably. Can you advise if such mortgages are available in Ireland, how to go about accessing one and the pros and cons of such mortgages?
Ms LK, Dublin
A Multi-currency or foreign currency mortgages must be one of the very few features of the residential mortgage market that never really appeared here during the boom years. Essentially, these products allow you to hold your mortgage in, say, yen or dollars rather than euro.
In general, taking out a foreign currency mortgage exposes the mortgage-holder to two additional risks. In the first place, they are taking a punt on foreign exchange rates between the euro in which they are earning their income and the currency in which the mortgage is held - such as yen.
Given the euro's strength in recent times, that would be a good thing, but there is no guarantee of such a trend continuing.
Secondly, they are generally betting on the direction of interest rates in the currency zone where they hold the mortgage. With Japan now boasting rates of 0.5 per cent, that might work in your favour, but there is no guarantee.
There was a small market in Ireland for mortgages denominated in sterling but - given foreign exchange and interest rate movements - that never really took off. As far as the more exotic currency options are concerned - US dollar, Japanese yen or Swiss francs being the most common internationally - I am told you will not find anyone in the Irish market offering such a product, at least for the residential mortgage market.
People in the industry here point to the administration costs involved in what are likely to be individually tailored products, and increased nervousness about litigation from customers, who might claim they were unaware of risks involved in such transactions.
Ultimately, they say, such mortgages are not viable in the Irish market and, anyway, there is no demand. One might argue that customers have been given no chance to generate demand.
A couple of the banks were offering foreign currency mortgages a few years ago to people connected with the financial institutions - including yen mortgages, which have proved a handsome bet in recent years. Clearly, it paid to be on the inside.
You can look abroad for such a mortgage, but you are unlikely to find takers as they might have significant difficulty registering a charge on your property across international borders.
Finally, lest there be any confusion, I should note that foreign currency mortgages are available on certain commercial property transactions. These customers, it is argued, are better able to cope with the vagaries of forex and interest rate movements and are liable to have access to professional advice in these areas. That's true.
It is also true that, if the Irish banks were to refuse to provide such mortgages to companies establishing foreign operations, they would simply lose significant business.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2 or by e-mail to dcoyle@irish- times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering questions. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.
