Britons win fight for fair tax after Spain charges them more than double

Spanish Capital Gains Tax

The Spanish government could soon be forced to pay hundreds of Britons tens of millions of pounds in compensation following a landmark court ruling.

Britons who were not residents of Spain but sold property there at a profit between July 2004 and December 2006 were charged 35 per cent capital gains tax compared to 15 per cent for residents. A UK couple have become the first to be awarded a refund after a Spanish court ruled in their favour following a year-long battle.

The root of the problem is that Britons were charged more tax than Spaniards when they sold their property – in contravention of EU rules on discrimination. The problem was highlighted by currency exchange broker HiFX, which launched the website Spanishtaxreclaim.co.uk in March 2008 to help people who had been overcharged.

"It is fantastic news the first British couple has been successful, and that a total of 600 other British claimants are now in the process of putting their cases forward," said Mark Bodega, director of HiFX.

Thousands of people are yet to register a claim and time is of the essence as Spanish law dictates that claims can only date back four years.