LONDON (Reuters) - Thousands of Britons who made capital gains by selling Spanish properties could be due tax rebates to the tune of a collective 50 million pounds, a legal firm says.
They could be in line for a 20 percent tax rebate because foreign non-residents were charged a higher rate than Spanish nationals — and that contravenes the European Community Treaty, according to Spanish lawyer Costa, Alvarez, Manglano & Associates.
Those who sold a home in Spain before changes to the rules last year were charged the Spanish non residents’ income tax rate of 35 percent on any capital gains instead of the Spanish flat rate of 15 percent.
That means those affected — an estimated 4,500 British people, plus thousands more residents in other European countries — can try and reclaim the difference from the Spanish authorities, plus interest.
The situation could prove to be the largest class action against the Spanish government for years.
Currency specialist HiFX says, at a conservative estimate, Britons are each due 8,300 pounds in overpaid capital gains tax.
Add to that interest of around 6 percent from when the tax was paid and those who have made gains on Spanish property could be due almost 11,000 pounds each — a collective 49.5 million pounds.
“A change in the law at the start of 2007, which saw the standard capital gains tax for non-residents being brought in line, passed by largely unnoticed,” said the firm’s Emilio Alvarez.
“(But) this tax trap is thought to have affected hundreds of thousands of people across Europe and in the UK.
“Due to stringent legal restrictions, people who bought at the start of 2004 have already missed out, as claimants must register within four years, but thousands of Brits can still join forces and fight to get the Spanish tax authorities to pay back the money owed.”
Costa, Alvarez, Manglano & Associates has set up a “no win, no fee” operation to help people stake a claim.
For more information, go to www.spanishtaxreclaim.co.uk, call 0845 6803849 or email firstname.lastname@example.org.
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