The potential capital gains windfall for Britich expats who sold property in Spain before 2007 comes after the scraping of a discriminatory Spanish tax law. The law had meant that capital gains tax paid by British expats who sold their property before 31 December 2006 were charged a ‘non-residents rate’ of 35%, compared with 15% for Spanish residents. However, the Spanish government was forced to change the law in 2007 after the EU declared it discriminatory.
Due to the change, British expats who sold property between 1 January 1997 and 31 December 2006, of which there is an estimated ten thousand, are entitled to a refund for the overpaid tax and have until 21 November this year to apply.
Mark O’Sullivan, director of dealing at Currencies Direct, said: “With a weakening pound and a steady euro, this welcome tax refund can be maximised by British expats who can make a claim and exchange their money as soon as possible.
“When yearly interest is taken into consideration on property sold as long ago as 1997, we are talking about considerable sums of money. It will be great for expats to get their cash back, but even better if they can use the current exchange rate to their advantage and get the most from their unexpected windfall.”
