WEEKS TO CLAIM SPANISH PROPERTY SALE WINDFALL
By David Eade
 
The word is out! If you sold a property in Spain between 1997 and 2006 you have just weeks left to begin the three-month process of reclaiming capital gains tax (CGT) that you were illegally charged by the Spanish government on the sale of your property.
 
The Spanish government imposed a capital gains tax of 35 per cent on sales by Britons compared to a rate of 15 per cent paid by Spanish nationals. To date some 500 Britons are reported to have reclaimed an average of £14,980 each from the Spanish tax office. However many others will miss out unless they make the October deadline.
 
This 133 per cent overpayment not only means a profit in the region of  £350 million for the Spanish Government but also contravenes European Community Treaty rules on discrimination and therefore this tax was unduly charged by Madrid.
 
In 2009, the European Court of Justice ruled that the tax contravened European Community Treaty rules against discrimination. Hence UK or EU citizen who sold a property in Spain between 1 January 1997 and 31 December 2006 could claim back the excess charge.
 
However the ruling also stated that all claims need to be settled by the end of this October. As August is considered a holiday month in Spain, sellers have just weeks left to begin the claim process, which lasts up to three months.
 
Mark Bodega is marketing director of currency specialists Hifx that helped expose the tax scam. He told the Financial Times: “We have been fighting for the last two years to help British people reclaim the CGT that they were illegally overcharged by the Spanish government.
 
“We estimate that there are still thousands of Brits who sold Spanish properties in the eligible time period who still haven’t come forward. But time is running out - once the deadline passes they will never be able to reclaim this money again. We now urge anyone else who thinks they may have been affected by this to come forward.”
 
The following steps should be taken by those wishing to make a claim:
1. Check you sold a property in Spain between January 1997 and December 31 2006 and were not a fiscal resident in Spain when you sold it.
2. You need a copy of a tax form called Modelo 212 or 210 to proceed. If you do not have this you will need a copy.
3. Seek specialist legal advice from a Spanish lawyer or a British lawyer familiar with Spanish laws and procedures.
 
If you have already attempted and failed to successfully claim you can now resubmit your application. The European Court of Justice has recently opened new legal actions for this reclaim allowing claimants to make a second attempt.
 
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