Not that the ex-pats are holding out their hands without just cause. It would appear that all this time Brits and other EU residents who sold property they had owned in Spain were overcharged for Capital Gains Tax (by 20 per cent).

The Spanish Non Residents Tax rate was set at 35 per cent compared to 15 per cent paid by Spanish nationals.

The European Commission has since ruled that the hefty tax for non-nationals contravenes European Community Treaty rules on discrimination and, as such those affected are entitled to a rebate on their overpayment.

What To Do Next

Spanish laywers Costa, Alverz, Manglano & Assocaites – who originally exposed the loophole with HiFX - have set up a site with information for those who have been affected: www.spainishtaxreclaim.co.uk

However, those who sold up in Spain prior to June 2004 will not be eligible to make a claim as Spanish law will only allow claims that are up to four years old.

Nevertheless, hundreds of Brits have already begun proceedings to get their money back, and with six per cent annual interest factored into the CGT bill, the average claim is in excess of £19,000.

Mark Bodega, Director of HiFX, comments: "Since launching the website and establishing this class action against the Spanish tax authorities, 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 from the Spanish government.

"So far more than 200 people have registered to be part of the class action, which is a huge response – but we anticipate there are more than 4,500 British people affected by this, meaning there are still a lot of people who need to come forward to reclaim what is rightfully theirs."

Regards