BRITISH expats in Spain could be rushing home as the Chancellor of the Exchequer George Osborne prepares a new foreign tax raid.

The new plan will target expats and oversea retirees – all non-residents must pay tax on UK income – and especially those earning money from UK properties.

More than 175,000 expats who own real estate in the UK would be affected by the scheme.

Pensioners could also lose out, with the proposals expected to cut the average couple’s pension draw by up to £4,000 (€4,990) per year.

EU nationals and British expats can currently offset income earned in the UK against the £10,000 (€12,470) personal allowance.

Over 400,000 people could be affected if these new guidelines are accepted.

The plan could draw the exchequer an extra £400 million (€499 million) each year.

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