How to report a bank for incorrect tax reporting.

Sillychuckie

To close this thread off (for anyone that remembers it):

• FOS ruled against me (sure took their time!), for 2 main reasons.

1. I was not out of pocket (as the lender had paid me off by more than my tax liability).
2. In some small print I was unaware of, the lender states:

"Under the terms of your offset mortgage, it will not be possible to retain the offset savings account once the mortgage has been redeemed. As such, we will transfer your offset savings account to an instant access savings account, unless you instruct us otherwise. When this transfer has taken place, the interest for the whole of the month of redemption, will be paid gross."

So, if you redeem on 31st of the Month, any funds in your offset account from 1st → 31st, are not actually used to offset the mortgage. They are treated as interest, and are therefore fully taxable. Had I waited 1 more day to complete, the funds would have been applied to my reduce my mortgage amount, in an enitrely tax-free manner.

I think this is a poor way for them to operate things, as it means the account behaves completlely differently during the month of redemption than it does for the decades before it… but fair enough. It is in black and white.

My only remaining grounds for complaint are that I was told by the lender when I queried using my offset account during this period (between redemption calculation & redemption), that the funds would still be 'benefitting me' - but, they were vague on precisely how they would be benefitting me, plus, I don't have it in writing as it was via OLB which I since lost access to.

The FOS think I was pretty lucky to get my tax liability covered as a goodwill gesture, and I think at this point, I'm inclined to agree. So I'll be taking it no further.

I hope it doesn't catch out others in future, but as I've said before, the circumstances are niche.

• Heavy use of an offset facility (in my case, ~250k)
• Long period between usual mortgage payment date (1st), and redemption date (31st).
• So I basically had a full months worth of interest, on a large sum, as the money would only have been used to offset the mortgage, had it ticked over to the next month by 1 day.

Frustrating, but I'll count myself lucky, all things considered. Others might be impacted, but likely to a lesser extent, or not at all depending on their tax rate etc.

Sorry for being a little cagey about it all, initially.

Thanks. SC.

p.s. Lender: CBS.