Spanish court victory paves the way for tax refunds

Permalink: Spanish court victory paves the way for tax refunds
by Gill Montia

A recent High Court decision from Spain means that thousands of Britons could be able to reclaim some of the capital gains tax paid when they sold homes in the country.

In July of last year, a group of British non-residents who sold property in Spain between June 2004 and December 2006 began action against the Spanish authorities.

During the period, British non-residents selling their Spanish homes paid capital gains tax at the Spanish non-resident rate of 35%.

Lawyers, Costa, Alvarez, Manglano & Associates are bringing a collective action to reclaim 20% of the tax paid, putting it in line with the rate paid by Spanish nationals, at 15%.

They have argued that the higher rate contravened European Community Treaty rules.

According to a BBC report, the High Court in Valencia has now ruled in favour of one British couple, Mr and Mrs Roy, and the law firm says it has gathered similar cases, with an average claim worth £14,100.

The lawyers add that the decision by the Valencia court was so clear, that they are not expecting other High Courts in Spain to come to a different decision.

There is a four-year time limit on reclaiming the tax, starting from the date the tax was paid, rather than the sale date, and it is estimated that around 10,000 UK citizens still have time to act.