Mortgage Interest Relief At Source
Encyclopedia
Mortgage Interest Relief at Source, or MIRAS, was a scheme introduced in the United Kingdom
by Chancellor of the Exchequer
Roy Jenkins
in 1969 in a bid to encourage home ownership; it allowed borrowers tax
relief for interest
payments on their mortgage
.
In the 1983 Budget Geoffrey Howe
raised the tax allowance from £25,000 to £30,000; unmarried couples with joint mortgages could pool their allowances to £60,000 and this remained unchanged until in the 1988 Budget, when Chancellor of the Exchequer Nigel Lawson
ended the option to pool allowances (a provision that had been known as Multiple Mortgage Tax Relief) from August 1988, a decision he later publicly expressed regret at not having implemented with effect from the time of the budget, as it is generally accepted that the rush to beat the deadline from the time of the Budget up until it was ended fueled a sharp increase in house prices.
MIRAS was completely abolished in April 2000 by then Chancellor of the Exchequer (now retired Prime Minister
) Gordon Brown
who argued it had become a middle class
perk
.
Receiving MIRAS was one of the justifications given by mortgage advisers when selling endowment mortgage
s.
With house prices slumping and the British economy going into recession
, there are many arguing for the return of some kind of similar scheme to help those in negative equity
and encourage a revival in the housing market.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
by Chancellor of the Exchequer
Chancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
Roy Jenkins
Roy Jenkins
Roy Harris Jenkins, Baron Jenkins of Hillhead OM, PC was a British politician.The son of a Welsh coal miner who later became a union official and Labour MP, Roy Jenkins served with distinction in World War II. Elected to Parliament as a Labour member in 1948, he served in several major posts in...
in 1969 in a bid to encourage home ownership; it allowed borrowers tax
Taxation in the United Kingdom
Taxation in the United Kingdom may involve payments to a minimum of two different levels of government: The central government and local government. Central government revenues come primarily from income tax, National Insurance contributions, value added tax, corporation tax and fuel duty...
relief for interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
payments on their mortgage
Mortgage loan
A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
.
In the 1983 Budget Geoffrey Howe
Geoffrey Howe
Richard Edward Geoffrey Howe, Baron Howe of Aberavon, CH, QC, PC is a former British Conservative politician. He was Margaret Thatcher's longest-serving Cabinet minister, successively holding the posts of Chancellor of the Exchequer, Foreign Secretary, and finally Leader of the House of Commons...
raised the tax allowance from £25,000 to £30,000; unmarried couples with joint mortgages could pool their allowances to £60,000 and this remained unchanged until in the 1988 Budget, when Chancellor of the Exchequer Nigel Lawson
Nigel Lawson
Nigel Lawson, Baron Lawson of Blaby, PC , is a British Conservative politician and journalist. He was a Member of Parliament representing the constituency of Blaby from 1974–92, and served as the Chancellor of the Exchequer in the government of Margaret Thatcher from June 1983 to October 1989...
ended the option to pool allowances (a provision that had been known as Multiple Mortgage Tax Relief) from August 1988, a decision he later publicly expressed regret at not having implemented with effect from the time of the budget, as it is generally accepted that the rush to beat the deadline from the time of the Budget up until it was ended fueled a sharp increase in house prices.
MIRAS was completely abolished in April 2000 by then Chancellor of the Exchequer (now retired Prime Minister
Prime minister
A prime minister is the most senior minister of cabinet in the executive branch of government in a parliamentary system. In many systems, the prime minister selects and may dismiss other members of the cabinet, and allocates posts to members within the government. In most systems, the prime...
) Gordon Brown
Gordon Brown
James Gordon Brown is a British Labour Party politician who was the Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 until 2010. He previously served as Chancellor of the Exchequer in the Labour Government from 1997 to 2007...
who argued it had become a middle class
Middle class
The middle class is any class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class....
perk
Employee benefit
Employee benefits and benefits in kind are various non-wage compensations provided to employees in addition to their normal wages or salaries...
.
Receiving MIRAS was one of the justifications given by mortgage advisers when selling endowment mortgage
Endowment mortgage
An endowment mortgage is a mortgage loan arranged on an interest-only basis where the capital is intended to be repaid by one or more endowment policies. The phrase endowment mortgage is used mainly in the United Kingdom by lenders and consumers to refer to this arrangement and is not a legal...
s.
With house prices slumping and the British economy going into recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
, there are many arguing for the return of some kind of similar scheme to help those in negative equity
Negative equity
Negative equity occurs when the value of an asset used to secure a loan is less than the outstanding balance on the loan. In the United States, assets with negative equity are often referred to as being "underwater", and loans and borrowers with negative equity are said to be "upside down".People...
and encourage a revival in the housing market.