The Spanish government has started to repay millions of Euros to British holiday homeowners who were hit with punitive Inheritance Tax charges.

The tax charge – which in many cases was as much as a third of the property’s value – has been levied on up to 30,000 Brits that have inherited a holiday home in Spain, according to research by the Spanish solicitors Spanish Legal Reclaims.

The Spanish government has now hastily changed its Inheritance Tax law after the European Court of Justice ruled that the legislation - which exempted Spanish residents from the charge - was discriminatory.

Under the law, Spanish residents were exempted from up to 99% of the tax charge, while homeowners living abroad had to pay the full amount within six months of inheriting.

With more Britons owning holiday homes in Spain than any other nationality, UK citizens were disproportionately affected by the law.

The Spanish authorities are now being forced to repay the Inheritance Tax paid by non-residents. The legal firm added that the average repayment is €25,000.

Luis Cuervo, CEO at Spanish Legal Reclaims, comments: “Spain’s authorities have agreed that non-residents who inherited a Spanish property during the past four and a half years can claim back the tax they paid, but inheritors can only claim once and there are time limits for claiming, so it’s essential they seek expert legal advice to ensure they get it right first time.”