£283m windfall as EU rules Brits were overcharged in Spain

17 November 2009 | By Robert Thickett

The ECJ ruled that non-Spanish residents had been overcharged by 133% by the Spanish government for Capital Gains Tax from 1997 up until December 2006.

Non-Spanish citizens who were ordered to pay 35% CGT on their properties as far back as 1997 will be able to make a tax reclaim.  

Those home owners who only paid the 5% compulsory withholding tax on their property selling price will now also be able to make a reclaim.

The average amount for those that have paid the full 35% tax is currently £13,370 and for those who only paid the 5% compulsory withholding tax is £7,130.

Following a successful ruling by the Spanish courts in February this year, any non Spanish resident who had purchased a property between 2004 and 2006 was able to apply for a tax rebate following the ruling that the overcharging was illegal.

But the new ruling by the ECJ means that UK home owners who sold a property as far back as 1997 will now be able to lodge a claim for the estimated £283m in tax they have overpaid.

Figures by currency exchange broker HiFX indicate that with the ECJ extending the reclaim period by an additional eight years (from 1997) then 90,000 British people could now come forward to make a reclaim.

Mark Bodega, marketing director of currency specialists HiFX, says: “We estimate that with the reclaim period now being extended as far back as 1997, people in the UK who were affected could now come forward to reclaim almost £300 million which rightfully belongs to them, and which they were illegally overcharged.  

“We are currently working with 600 British claimants who are in the process of putting their cases forward. We now urge anyone else who thinks they may have been affected by this to come forward.”