Brits with Spanish holiday homes await tax rebate
British property investors in Spain could be due for a capital gains tax (CGT) rebate.
Those who sold property in Spain between March 2004 and December 2006 could be in line for a share of a £37 million rebate, after an error in the country's tax code was discovered.
British non-residents who sold their Spanish properties during this period paid a Spanish Non-Residents' Income Tax rate of 35 per cent on any capital gains made on their investment - compared to a rate of just 15 per cent paid by Spanish nationals.
However, under European Community Treaty rules on discrimination the discrepancy in tax rates is illegal.
As such Brits were charged an additional £37 million, around £11,000 per sale - to which they are now entitled a rebate.
"This tax trap is thought to have affected hundreds of thousands of people across Europe and in the UK," said Spanish lawyer Emilio Alvarez.
Mr Alvarez exposed the inconsistency while working with currency broker HiFX.
Placing an actual figure on the amount of people affected by this is very difficult, according to the broker, as the Spanish government understandably is refusing to disclose certain information.
However, HiFX believes a conservative estimate is in the region of 4,500 British people, plus thousands more residents in other European countries, each paying an average of £14,000 each in capital gains, having sold property in Spain over the three-year period.
Yet, those who sold before this time may already have missed the opportunity to recoup the cost of the additional tax.
"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 of Brits can still join forces and fight to get the Spanish tax authorities to pay back the money owed," concluded Mr Alvarez.
- Tags:
- news ,
- property ,
- property abroad
Comments
Newsletter sign up