Hundreds of thousands of Britons who own second homes in Europe could receive a windfall of up to five years' worth of tax paid back to them by HM Revenue & Customs (HMRC).

In a bizarre twist to a change in tax law slipped out by HMRC alongside the Budget this week, it emerged that owners of furnished holiday lets on the Continent would be given the opportunity to apply retrospectively for a tax break previously reserved only for owners of UK-based holiday lets.

The change will simultaneously penalise owners who let out their UK properties to holidaymakers as the tax break will be scrapped altogether next April, forcing them to pay thousands of pounds extra a year to HMRC.

An estimated million Britons own second homes abroad, according to holidaylettings.co.uk. To be eligible for the allowance, properties must be let for ten weeks a year and available to let for 140 days.

Eligible owners of foreign property have until July 31 2009 to apply to amend their tax returns for a rebate going back to the tax year 2006-07.

However, for claims going back to 2003-04, owners can write a letter to the tax office claiming that there has been an error or mistake on previous returns.

Source: Rebecca O'Connor, Times Online