Tax News

A British couple are celebrating victory after it was found that capital gains tax charged when selling their Spanish property was over twice the amount paid by Spanish residents. They will get a £10,000 refund. It is expected that thousands of similar cases will follow.

Until 2007, anyone not fiscally resident in Spain who sold property there paid 35% tax on the sale, whereas Spanish nationals paid only 15%. This was challenged by the European Union under discrimination rules, and the rates were rationalised to a standard 15%.

Mr & Mrs Roy were subject to this higher rate when they sold their property in 2004. Following their year-long fight they will be the first to have the overpayment refunded. At the time of writing, it is believed that six hundred cases are currently being pursued. There could be thousands more, each judged separately by the Spanish courts, which could cost the Spanish government millions of Euro.

If you believe you may be affected, do not delay as Spanish tax laws place a time limit of four years on tax refunds. The checklist below will help you to see if you could make a claim:

• The property has to have been sold between July 2004 and 31 December 2006


• At that time you must have been not resident in Spain for financial purposes


• You must have sold the property as an individual, not a company


• Capital Gains Tax must have been paid on the sale of the property

To proceed, you should contact a lawyer familiar with the case who will first of all ask you for a copy of the form completed when selling the property ("Modelo 212").