The deadline is approaching for Brits who sold a property in Spain between 1997 and 2006 to reclaim Capital Gains Tax (CGT) that they were illegally charged by the Spanish government on the sale of their property.
Currency firm HiFX says that to date hundreds of Britons have successfully reclaimed an average of &euro18,000 (£14,980) each from the Spanish Tax Office that they were illegally charged when the Spanish government imposed a CGT of more than twice the amount paid by Spanish residents on properties they sold in Spain.
The tax loophole – which was originally exposed by HiFX and Spanish lawyers, Costa, Alvarez, Manglano & Associates – came about after British non residents paid a Spanish Non Residents’ Income Tax rate of 35% on any capital gains, compared to a rate of 15% paid by Spanish nationals. This 133% overpayment not only totals a profit somewhere in the region of an estimated £350 million for the Spanish Government, but also contravened European Community Treaty rules on discrimination and therefore was unduly charged by the Spanish Government.
In November last year the European Court of Justice (ECJ) ruled in favour of claimants and extended the period in which people had sold a property and could successfully claim from only 2004 – 2006 to 1997 – 2006 meaning any UK / EU citizen who sold a property in Spain between 1 Jan 1997 and 31 Dec 2006 can claim. Every seller could be entitled to reclaim whether they paid just the 5% withholding tax or the full 35% CGT. However the ruling also stated that all claims need to be settled by the end of October 2010 meaning sellers have just one month left to begin the three month claim process (August is a holiday month in Spain).
Brits who have already attempted and failed to successfully claim can now resubmit their claim via Costa, Alvarez, Manglano & Associates as The European Court of Justice have recently opened new legal actions for this reclaim allowing claimants to make a second attempt. To date Costa, Alvarez, Manglano & Associates has a 100% success rate on claims made.
Home owners who only paid the 5% compulsory withholding tax on their property selling price are now also able to make a reclaim. The average amount for those that have paid the full 35% tax is currently &euro18,000 and for those who only paid the 5% compulsory withholding tax is &euro7,130.
Following the launch of the www.spanishtaxreclaim.co.uk website in March 2008, 500 British people have claimed or are in the process of reclaiming the money they were illegally overcharged.
Mark Bodega, marketing director of HiFX, said: “We have been fighting for the last two years to help British people reclaim the Capital Gains Tax that they were illegally overcharged by the Spanish government. At the moment every penny counts and a refund of over &euro13
