Hello

Some of you may be aware of the EU Court of Justice ruling that effectively means that any expat who sold a property between 1997 & 2006, could be in for a substantial refund from the Spanish Tax Department.

On October 6th the European Court of Justice ruled that Spain violated the European laws by charging a higher rate of capital gains tax to non-residents, this being 35% as opposed to 15% for Spanish nationals.

The ECJ ruling opens now the doors for possible refunds to any EU citizen who sold a property in Spain between Jan. 1997 and Dec. 2006, whether they paid the full 35% CGT or only the 5% withholding tax.

According to the case law set up by the ECJ, European citizens who have been charged a tax which turned out to be illegal are entitled to get the refund of said tax. The problem arises regarding the procedure to get said refund. EC Law does not have any specific rule to get back the tax. The ECJ has held many times that the procedure to get the refund is governed by the domestic rules of the Member State concerned (Spain in this case).

The consequences of the ECJ ruling will have a great impact, not only for those citizens that paid the full 35%, but also for those that only paid the 5% compulsory withholding tax on the selling price.

I represent a UK based claims management company, licensed by Ministry of Justice in UK, that has many years experience in running claims against banks, insurance companies etc, and together with our Spanish legal partners we are currently processing these claims.

Should you feel that you may be entitled to claim or have a friend or colleague that may have sold a propertry in Spain and moved back to UK, we are happy to file the claim on a ?no win no fee? basis.

We are also looking to partner with collaborators such as estate agents, lawyers etc and we have substantial funding available in order that commissions can be paid out on acceptance that the claim is valid. Youir old database of clienst could be worth a substantial amount of money !

Please contact us should you wish to make a claim or require more information on collaboration.

Thank you

Tom Edwardson
AIMS Legal Limited
Tel - 673971193
.(JavaScript must be enabled to view this email address)

Tom: I’ve heard from a law office in Barcelona that this is a scam and that it has been denounced.

The Expatriator - 13 March 2010 02:22 AM

Tom: I’ve heard from a law office in Barcelona that this is a scam and that it has been denounced.

Well your information is totally wrong !

We have 150 clients who have their overcharge repaid by Hacienda.

Please pass me the name of the law firm and I will contact them

I do think you should be more careful with your statements on a forum like this.

http://www.telegraph.co.uk/expat/4950142/British-couples-living-in-Spain-illegally-overtaxed-on-properties.html

Thank you

Hi Tom,

Actually I am careful.

From the Telegraph:

A court in Valencia ruled that they had been unlawfully charged a 35 per cent non-residents capital gains tax on the sale of their properties, when the rate for nationals was only 15 per cent.

The higher rate contravened the European Community Treaty rules on discrimination and the court said the higher levy must be repaid, with 6 per cent interest.

This does indeed sound like good news for many expats. So who qualifies to pay the 15% capital gains tax as a Spanish national? Or does the ruling say that the tax regime was discriminatory and therefore illegal to begin with?

The Expatriator - 14 March 2010 01:21 AM

Hi Tom,

Actually I am careful.

From the Telegraph:

A court in Valencia ruled that they had been unlawfully charged a 35 per cent non-residents capital gains tax on the sale of their properties, when the rate for nationals was only 15 per cent.

The higher rate contravened the European Community Treaty rules on discrimination and the court said the higher levy must be repaid, with 6 per cent interest.

This does indeed sound like good news for many expats. So who qualifies to pay the 15% capital gains tax as a Spanish national? Or does the ruling say that the tax regime was discriminatory and therefore illegal to begin with?

Basically if you were NOT tax resident in Spain AND sold a property between 1997 and 2006 (when the rate was changed by Hacienda) you are entitled to RECLAIM the 20% you were charged. This applies to the bulk of UK/EU sellers during that 9 year period, where the gains were substantial as this was the period of boom in the real estate market.

The procedure we have developed is successful and 100% of the claims are paid on a NO WIN NO FEE basis plus interest.

I sincerely hope the readers of this forum take advantage of this situation.

Please feel free to contact me at anytime

Thanks

I am suspicious of the “No Win, No Fee” offer.  The implication is that the adviser is taking the risk of the claim failing (and thus working for nothing) so that justifies a hefty fee at the end, probably based on the tax reclaim “won”.  That may be acceptable if there is a genuine risk of failure and a lot of upfront costs, such as taking a complex negligence case to court, but a CGT reclaim is not in that league.

The European Court has already confirmed that if someone sold a house and paid CGT on at the non-resident rate during the period in question, the Spanish must repay the difference.  It will be clear from a claimant’s circumstances and documentation whether the claim will be successful or not.  Therefore the adviser should simply make the claim and charge for his time.  My suspicion is that “No Win, No Fee” offer actually means “we will take on your claim if it is valid and then take a large slice of the money for ourselves, totally out of proportion to the time spent on the case or any risks we have taken”.

If the original poster would like to elaborate on the fee this might help Forum members to see if it is fair and good value.  Is the final fee based on a % of the claim or time spent on the case?  Given that the poster has indicated that he works for a UK company which employs Spanish lawyers and pays substantial commissions to estate agents just for giving them information about past clients, I suspect that the back end fee is very high to pay off all these people but I am willing to be proved wrong.

Any forum member who feels that they may have overpaid tax can contact me.  I am a UK Chartered Accountant but am registered to practice in Spain.  In conjunction with my Spanish tax partner, who has decades of experience dealing with the Agencia Tributaria, I will assess their claim and supporting documentation for nothing.  They can do what they want with that information -  pay us for our time to make a claim or find someone else to help them.

Hello

The final fee is 35% of the settlement from Hacienda.

The issue here is awareness as the window closes on 29th November 2010 and I am merely trying to make people aware before the door slams shut.

All CMC companies work on a similar structure with issues such as PPI claims and I have no wish to enter a debate with you as regards the ethical issues of fees.

We are the only firm obtaining a degree of success with our spanish lawyers and this is key as the presentation of the case is crucial and has, because of incorrect presentation from some tax lawyers has led to rejections by Hacienda which has effectively closed the door totally on the claim.

We are licensed by Ministry of Justice in UK and process thousands of UK claims every year.

The clock is ticking here on the claim window and I would urge any clients to contact us.

Thank you

spaintaxreclaim - 14 March 2010 01:52 PM

Basically if you were NOT tax resident in Spain AND sold a property between 1997 and 2006 (when the rate was changed by Hacienda) you are entitled to RECLAIM the 20% you were charged. This applies to the bulk of UK/EU sellers during that 9 year period, where the gains were substantial as this was the period of boom in the real estate market.

As I understood from the BBC and Telegraph articles about this there’s some sort of 4 year limit from the time the house was sold to when the taxes were paid or something, no? So it means only those who sold from 2004-2006 are eligible, correct?

No that is standard spanish law with the 4 year rule on claims.

This was challenged successfully in Strasbourg and as the tax was deemed illegal that rule was overturned.

The window is form 1997 to 2006 on any CGT payment by a non resident

Thanks