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Britons who sold property in Mallorca could claim capital gains tax rebate following court case

Thousands of Britons who sold their villas in Spain are expected to receive a significant tax rebate. A court in Valencia last week ruled that a British couple had been unlawfully charged a higher rate of capital gains tax (CGT). The decision is likely to set a precedent for many other Britons in similar situations.

The court ruled that Alan and Margaret Roy had been illegally overtaxed when selling their villa in Spain, reports The Telegraph. The British couple were charged the non-residents CGT rate of 35 per cent, while nationals pay just 15 per cent.

It was argued that the higher rate contravened the European Community Treaty rules on discrimination. The court in Valencia ruled that the higher charge must be repaid to Mr and Mrs Roy, with six per cent interest.

It is expected that the court's ruling will encourage more Britons to reclaim the higher rate of tax. Commenting on the verdict, Mr Roy said: "The principle is established for others to get justice."

Mark Bodega, from currency broker HiFX, told the paper: "It is fantastic news that 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. Between them they could reclaim £8.4m plus interest, based on the average reclaim figure of £14,100."

Bodega added that it was vital that anyone who believes they have been affected should come forward to reclaim "what they have been wrongly overcharged by the Spanish government". The case was argued by solicitors Costa, Alvarez, Manglano & Associates, who have been handling similar proceedings on a no-win no-fee basis. The firm will take 35 per cent commission if the case is won.

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