Exposed: the Spanish government's £37 million I.O.U to Brits

Thousands of Britons who have sold a property in Spain between March 2004 and December 2006 could be owed a 20% tax rebate to the tune of £37 million - £11,000 each, including interest - as a result of a Spanish Government Capital Gains Tax (CGT) scam exposed by Spanish lawyers, Costa, Alvarez, Manglano & Associates and currency exchange brokers HiFX.

British non residents who sold their Spanish properties during this period paid a Spanish Non Residents' Income Tax rate of 35% on any capital gains, compared to a rate of 15% paid by Spanish nationals. This 20% overpayment not only totals a profit somewhere in the region of £37 million, but also contravenes European Community Treaty rules on discrimination and therefore was unduly charged by the Spanish Government.

Placing an actual figure on the amount of people affected by this is very difficult, as the Spanish Government understandably does not want to disclose this information. However, one of the UK's leading currency specialists, HiFX, believes a conservative estimate is in the region of 4,500 British people, plus thousands more residents in other European countries, each paying an average of £14,000 each in capital gains, having sold property in Spain over the 3 year period. People who sold property previous to January 2004 have already missed out, as claims can only be made dating back over a four year period, meaning millions more have become victim to this tax trap.

HiFX, together with the Spanish lawyers are calling for British people to come forward and register their details to be part of what could be the biggest class action against the Spanish tax authorities for many years.

Commenting on the issue, Spanish Lawyer Emilio Alvarez said: "Anyone who has sold a Spanish property between March 2004 and December 2006 will have been victim to this inflated capital gains tax rate, which saw non residents scammed into paying inflated CGT bills by as much as 20%. This tax trap is thought to have affected hundreds of thousands of people across Europe and in the UK.

"A change in the law at the start of 2007, which saw the standard Capital Gains Tax for non residents being brought in line - a reduction from 35% to 15% , passed by largely unnoticed. As a result, thousands of people who had previously sold property in Spain are entitled to a 20% rebate, thought to average at £11,000 each including interest. Due to stringent legal restrictions people who bought at the end of 2003 have already missed out, as claimants must register within 4 years, but thousands of Brits can still join forces and fight to get the Spanish tax authorities to pay back the money owed."

For more information, and details of how to register your interest, visit spanishtaxreclaim.co.uk or call the helpline on 0845 680 3849or email: info@spanishtaxreclaim.co.uk