British people who have been caught up in the Spanish Capital Gains Tax storm have just one month to reclaim the illegally charged tax.
From 1997 up till 2006 British people who sold property in Spain were charged Capital Gains Tax at a rate of 35 percent, whilst native Spaniards were charged at 15 percent. This drastically different rate of tax was attributed to “non-resident’s income tax”.
Last year, the high rate of tax was put to an end in the European Court of Justice, after they decided that it went against discrimination laws laid out in the European Community Treaty. The court also decreed that people who had already paid tax at the higher rate were now entitled to reclaim the difference in money paid.
However, people must be aware that the deadline for all claims, October 2010, is fast approaching. Also note that the Spanish regard August as a holiday month, so no claims can be made during then.
Approximately 500 people have already made claims. To be eligible for the repayments you will have been a Spanish non-resident and sold a property in the country between January 1997 and December 31 2006. If this applies to you then you must get the appropriate tax forms, either Modelo 210 or Modelo 212, and consult a lawyer.
Currency firm HiFix, along with a team of Spanish lawyers, were the people who first exposed the unfair tax. HiFix director Mark Bodega said: “As a currency specialist, we help hundreds of people move to Spain every year. We were contacted by Costa, Alvarez, Manglano & Associates about this illegal charge in 2008, and have worked with them to publicise the ECJ ruling as much as we can. We estimate that there are still thousands of Brits who sold Spanish properties in the eligible time period who haven’t come forward. We’d advise anyone who thinks they might be eligible for a claim to go to the Spanish Tax Reclaim website, which was set up specifically to deal with the problem.”