Reclaiming Overpaid Spanish CGT

If you've sold a property in Spain in the last four years and paid 35% CGT on the profit (however unlikely it may be that you made a profit) then you may be able to reclaim some of the CGT.

There's a piece on this here, including a link to a reclaim form.

I feel that this is a bit misleading. If you reclaim tax from the Spanish revenue then in most cases you will end up paying it to Irish Revenue instead, unless of course you're on the standard 20% rate.

I read somewhere that it can end up costing people money as they have to employ someone - unless of course they're fluent in Spanish - to request the rebate for them & then they don't get to keep it.

Hi Perplexed,

I'm not sure why you think this is misleading, anyone who had obeyed the laws in place at the time would have paid 35% in Spain and been given a credit for it in Ireland.

The reclaim is obviously not for the entire 35%, it is only for the portion over the 15% that was being charged to Spanish locals at the time. This would merely entail declaring the reclaim on your next Irish tax return and paying an extra 5% to top up your Irish liability to the 20% payable here.

For the potential gain I'm not sure that I'd agree that it is a huge burden.

It's not yet certain that this will actually be refunded yet by the way, the Spaniards are fighting it as far as I'm aware.

Apologies. I think the article I read refers more to the UK than Ireland. I was mixing up my CGT & Income Tax. It is worth thinking about though....

Therefore even if this claim in Spain is successful (which is debatable in itself) it would probably mean that all that happens is that you get a refund in Spain and simply pass that refund to the Tax Authorities in the UK to pay the amount that you have now underpaid here. This would mean that the tax that they would have paid between the two countries would be the same after the court case but they have paid legal fees for the privilege of suing one tax system to pay another tax system. I suspect that most people would be worse off at the end of the day even if they win the case in Spain because of the legal fees involved in the claim. The lawyers are charging 35 per cent of the sums recovered as a fee.