CGT enquiry on sale of property in HKG beyond 9 months after immigration due to market issue

Hi, in Jan 2022 our family was approved under BNO route to migrate to UK , and we promptly moved in UK by July 2022 . Since early 2022, we had put the family's residential property in Hong Kong to the market for sale. Kindly note it was the sole property location which our family had lived in for 14 years, Unfortunately due to market deterioration in both price and demand (transaction volume), the sales of property was not concluded until recently when the time was beyond 9 months after we migrated. What is the recommended path so we could further explain the unique situations, and minimize the tax impact within the allowances ? Thanks for your advice in advance.

Hi Jackie Tong,
If the property was your main residence, you can Private Residence Relief for the period that the property was your main residence, plus a further 9 months, over the total number of months you owned the property.
This fractions can be used to calculate the amount of relief that can be set against the capital gain arising from the disposal of the property.
If there is still a gain after the relief is deducted, you have your annual exempt allowance (£12300 in 22/23, £6000 in 23/34 and £3000 in 24/25) to set against the gain.
What is left is subject to capital gains tax.
Thank you.

Thanks for your prompt reply and clarifications. Would appreciate your further advice on: A. The HS283 page linked below only provides forms  guidance up to fiscal year 2022-23; since my house was sold in Feb 2024, which HS283 form / guidance can we use to apply for the relief ? Suppose we should have the result of the assessment out of the HS283 Relief application before we could decide if CGT or other income tax be submitted. https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet B. Your earlier reply with the official definition of the relief - well noted with thanks. Along with the application of HS283, what additional evidence would be helpful if there were situational difficulties that might be taken into consideration on top of the official definition ? Many thanks for your further guidance in advance.

Hi,

The forms for 2023 to 2024 will not be available until after 6 April 2024 but the same principles will apply. As the additional 9 months is the only additional relief due, there is no other evidence required as nothing else would increase the Private Residence Relief.

Thank you.

Hello HMRC, while we have imigrated to UK under BNO visa in 2021 plus owned a house in UK and paid additional tax when buying the UK house as our second property, can we elect our overseas house as our main home and claim private residence relief for further 4 years as our job/studies in UK prevents us from living in our overseas house? We have not declared as non dom. And can we later elect our UK house as our main home after we sold our overseas house? Furthermore, if you're aware whether electing an overseas house as our main home will make this period of our stay in UK not counted towards our overall period of residency when applying for infinite leave to remain and citizenship? Thank you.

Thanks HMRC Admin for the earlier reply on my case in which the house in HK has always been my main home until the family moved to UK. As I sold the house in HKG in Feb, can I apply the relief by the time the HS283 relief form for 2023-24 will be available ? Or I should apply as soon possible ? Thanks for your further clarification.

Hi,
Yes.  You should write to HMRC at H.M. Revenue and Customs Self Assessment BX9 1AS, confirming the address at which you wish your main residence to be and the date that this should take effect from.
Thank you.

Thanks HMRC Admin for the earlier replies. I also just aware of and have reviewed the latest Policy Paper dated 7 March on "Technocal note: Changes to the taxation of non-UK domiciled individuals. Since we migrated in July 2022, and so prior to 6 April 2025, I have been tax resident in the UK for less than 4 years (and was beforehand a tax resident in HK for more than 10 years), so that I will be able to use this new regime for any tax year of UK rsidence in the remainder of those 4 years. i.e. I will not pay tax of Foreign Income and gains (FIG), and therefore the sales of my HK property, which was sold in Feb 2024. https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals/technical-note-changes-to-the-taxation-of-non-uk-domiciled-individuals#:~:text=From%206%20April%202025%2C%20the%20current%20remittance%20basis%20of%20taxation,years%20of%20non%2DUK%20residence. Is my eligibility to the new policy as mentioned above correct - and if so then I would not need to apply HS283 for Private Residence Relieve ? Furthermore, do I still need to file records of the sales of the HK property ? Thanks for your additional update in advance.

Hi,

You should apply it as soon as possible.

Thank you.

Dear HMRC, Probably I was not clear on my earlier question related to my situation under the latest Policy Paper dated 7 March. Would like to simplify and re-iterate my question as follows: In my case of immigration to UK by July 2022, and my property in HK was sold by Feb 2024, am I eligible under the Policy Paper dated 7 March ("Technical Note: Changes to the taxation ....") , since I fall in the criteria that I have been tax resident in the UK for less than 4 years before 6 Apr 2025 ? If then I "will not pay tax of Foreign income and gains". I could apply to be eligible to this Policy Paper dated 7 March as soon as possible. Thanks for your further clarification.

Hi,

Individuals who opt into the new regime will not pay UK tax on any foreign income and gains arising in their first four years of tax residence, provided they have been non-tax resident for the last 10 years.
This new regime will commence on 6 April 2025 and applies UK-wide. Individuals who on 6 April 2025 have been tax resident in the UK for less than 4 years (after 10 years of non-UK tax residence) will be able to use this new regime for any tax year of UK residence in the remainder of those 4 years.  
This guidance advises that you cannot backdate the 4 years, which means the existing rules on remittance basis will apply for capital gains disposals arising in 2023 to 2024. If you bring into the UK, the gain arising from the disposal of the Hong Kong property, the gain is taxable in the UK as remitted capital gains.  
In order to claim the remittance basis, you must complete a Self Assessment tax return, in which you would declare the disposal of the Hong Kong property.
Thank you.

Hi Jackie Tong.
Sorry no, as the new rules dont come into effect until 06/04/25.
Thank you. 

Dear HMRC / Admin 25 / Admin32, Many thanks for both your clarifications and will apply relieve and CGT accordingly. Some quick follow up to avoid missing deadlines / calculations as my case, of BNO migration with sales of a overseas property since 2022, might be different from the cases of a long time UK resident with sales of a local property : - since the property sale in Feb 2024 is a non-UK property (which clearly stated that CGT be reported within 60 days), is it correct that, according to the link below, the deadline for filing would be 31 Jan 2025 ? If so I could file the CGT together with my 2024-25 tax return ? https://www.litrg.org.uk/savings-property/capital-gains-tax/capital-gains-tax-reporting#:~:text=You%20can%20report%20your%20gains,when%20you%20had%20the%20gains. - For filing on line, is the below link correct and I should use my usual HMRC personal / business taxt account to file the CGT ? Is it advised that I do it asap from now (and no later than 31 Jan 2025), or better to report together with my personal tax return of 2024-2025 ? https://www.tax.service.gov.uk/capital-gains-tax-uk-property/start/report-pay-capital-gains-tax-uk-property#howTo Many thanks for your further supports.

Please note correction of earlier post (seeking for clarification) : - it is said in CGT documents, that "sales of UK Property" should be "reported within 60 days". While for "sales of non-UK property" there are official documents (see the link) that essential says "official" deadline be the Jan 31 of following year (i.e. by time of tax return of the related fiscal year) Please kindly comment.

Hi,

As the sale is in the 2023 to 2024 tax year, you have until 31 January 2025 to file the tax return and declare this. This would be on your personal tax return.

If you do not need to file a Self Assessment return, you can report the gain using the real time service here:

Report and pay your Capital Gains Tax

Thank you.