Lawyers point out they were wrongly charged 35% instead of 15% capital gains

Owners selling property in Spain between 2004 and 2007 can claim

Foreigners not resident in Spain who sold a property in this country between 2004 and the end of 2006 could be entitled to a 20 per cent tax rebate from the Spanish Government. According to the Spanish law firm Costa, álvarez, Manglano & Associates, foreigners who sold their Spanish properties before 2007 paid a Non Residents’ Income Tax rate of 35 per cent on any capital gains, compared to a rate of 15 per cent paid by Spanish residents. The law firm has pointed out that this contravenes European Community Treaty rules on discrimination and was therefore unduly charged by the Spanish Government.

“This tax trap is thought to have affected hundreds of thousands of people across Europe and in the UK”, explained lawyer Emilio álvarez of Costa, álvarez, Manglano & Associates.

“A change in the law at the start of 2007, which saw the standard Capital Gains Tax for non residents being brought in line (a reduction from 35% to 15%), passed by largely unnoticed. As a result, thousands of people who had previously sold property in Spain are entitled to a 20% rebate. Due to stringent legal restrictions people who bought at the end of 2003 have already missed out, as claimants must register within four years, but thousands can still join forces and fight to get the Spanish tax authorities to pay back the money owed,” continued álvarez.

Thousands affected

Currency exchange brokers HiFX say that a conservative estimate is some 4,500 Britons could be affected and are owed an average of £8,300 each, plus interest, taking the total up to as much as £11,000.

Anyone choosing to make a claim can expect a long process, as taking this sort of case through the European courts can take three or four years.

Costa, álvarez and Manglano are offering to assist people with their claims on a no-win, no-fee basis, taking 35 per cent of the amount gained if the claimant wins. They have set up a helpline for British residents (0845 680 3849) and a website (www.spanishtaxreclaim.co.uk).

Alternatively anyone who thinks they may be entitled to a rebate is advised to find their copy of the tax form labelled “Modelo 212” and any other relevant documentation and seek legal advice.

Regards