The yacht Roxanne is believed to belong to British National Lottery winner Bryan Harris and was named after his daughter.
He hit the jackpot some seven or eight years ago and scooped the best part of £11 million.
Harris, who used to keep his luxury yacht worth an estimated £1.5 million new on Wellies quay in Portals, was not on board yesterday, but the British skipper and mate were and did not even have time to make a may-day call, according to port sources.
Fortunately, a local fishing trawler Manuel Lobico was nearby and spotted the boat on fire. Her crew contacted the emergency services while heading to help the crew who had managed to leap into a small zodiac.
The sea rescue launch Salvar Mar Acrux was quickly dispatched to the scene along with a Guardia Civil launch while the air sea rescue service put a helicopter on stand by.
The skipper and his mate were plucked to safety and rushed back to port while the rescue vessels tried to fight the flames and save the luxury yacht.
Unfortunately the fire had taken hold of the vessel and there was little the fire fighters could do.
According to the emergency services, Roxanne sank in less than 20 minutes after fire fighters and the rescue crew reached the scene. However, both the skipper and his mate were said to have been picked up safe and sound, if a little shaken by their ordeal.