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Spanish CGT Rebate

Capital Gains Tax Rebate for Previous Owners of Spanish Holiday Homes

During the last 20 years the price of holiday homes in Spain have enjoyed an unprecedented boom, with values reaching a peak in 2007. Many UK residents though decided to dispose of their property and were subject to capital gains tax, levied by the Spanish government. If you were previously the owner of a holiday home property in Spain and disposed of the property between 1997 and the end of 2006, you would have paid 35% capital gains tax on the sale whereas Spanish residents only paid 15% tax. Many thought this was unfair and The European Court of Justice have now confirmed legal arguments put forward by a Spanish lawyer, representing a larger number of sellers that this difference in the amount of tax charged, contravenes European Community Treaty discrimination rules and should not have been charged at this level.

It is thus probable, that providing you meet the requirements, you may be able to reclaim the excess tax paid, plus interest on the excess. It is thought that an average claim will be in the region of £13000. It is estimated that as many as 90000 people may be eligible to make a claim. However it must also be remembered,, it is not easy to calculate exactly how much you will receive as you still have to allow for CGT in Britain. Under UK tax rules, if you are taxed at a lower amount overseas than you would have paid here, then you have to pay The UK taxman the difference, thus, once you receive your refund from the Spanish you may have to hand some back to HM Revenue & Customs.

The first step is to calculate if you qualify, to do so, you must meet the following criteria.

  1. You should have sold your Spanish property anytime between January 1997 and December 31st 2006.
  2. You were not a fiscal resident in Spain, when you sold the property.
  3. You have in your possession or you can obtain a copy of Spanish Tax form’ Modelo 212 and or 211 proving that the capital gains tax was paid.
  4. You have in your possession or you can obtain a copy of your purchase and sales deeds.

Of course like most claims of this nature, it is not straightforward and you will need to register your interest as soon as possible as all claims must be submitted within 12 months of the ECJ ruling. Some cases, will of course be rejected and if so, (for what ever reason), they cannot be re entered at a later date. It is thus of paramount importance that you obtain professional advise with a specialist Spanish tax solicitor familiar with International laws and court procedures.

This article was correct at the time it was written.

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