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As British holidaymakers head to Spain this summer in their thousands, many more are expected to be battling to reclaim millions of pounds from the country's tax authorities.
Around 300 Britons have begun their attempt to reclaim capital gains tax, after being overcharged by 20% following the sale of properties in Spain between June 2004 and December 2006, and many more complainants are forecast to come forward.
Currency exchange broker HiFX, which is working to publicise the case, estimates that around 4,500 people could soon be making claims at an average amount per person of £19,300, making a total of more than £86 million.
The case against the overcharge was sparked when British non-residents were charged Spanish non-residents' income tax rate of 35% on capital gains, compared to the rate of 15% paid by Spanish nationals.
In January this year, the European Commission judged that this contravened EC Treaty rules on discrimination and therefore was unduly charged by the Spanish government — which as a result is facing a class action lawsuit.
Many plaintiffs are expected to also demand missing interestich as a result is facing a class action lawsuit.
Many plaintiffs are expected to also demand missing interest at a compound rate of 6%, meaning payouts could be on average of 26% larger than first predicted.
HiFX director Mark Bodega said: 'We have always said it would be extremely difficult to put an actual figure on the number of people affected by this tax issue and how much they would be able to reclaim.
'This is largely because the Spanish government will not reveal this information.
'However, the sums that people are coming forward to reclaim are much larger than anticipated [and] we anticipate there are… still a lot of people who need to come forward to reclaim what is rightfully theirs.'
