Sale of Overseas Property

I moved to the UK in August 2022 using BNO 5+1 visa effective on 5 April 2022. I had a property in Hong Kong since Aug 2007 and this is my only residence. I sold the property in Sept 2022 and all the money from this sale was received in January 2023. I am going to fill the self-assessment. I would like to have your advice whether the capital gain from this sale needs to be reported in tax year 2022-2023? Thank you very much.

Hi,

If you are resident in the UK you are required to declare your worldwide income in your Self Assessment tax return.

Your foreign gain should be declared on SA108. 

If foreign tax has already been paid on your gain then you should also complete SA106 to claim your foreign tax credit relief.  

Please see page 6 of SA106 at question 33 onwards – Capital Gains – Foreign Tax Credit Relief and Special Withholding Tax. 

Thank you.

Thank you for your advice. Based on my understanding, because the Hong Kong property that I had before was my main residence since August 2007, therefore, I can claim Private Residence Relief. Also, please be advised that I did not need to pay on my gain in Hong Kong. Under this situation, should my gain be declared on SA108 for tax year 2022-2023? Thank you.

Hi,

Yes, you can claim full Private Residence Relief.

Use the SA108 to report it as no foreign tax should be due. as you are claiming Private Residence Relief, this figure should be included as part of your costs so that there is no taxable gain due.

You also need to state that you are claiming an election, that is, the Private Residence Relief,  PRR.

Thak you..

Happy New Year! Thank you for your reply. I try to finish my self assessment tax return and would like to have your advice before submission. 1. For SA108, as I can claim full Private Residence Relief, is it correct that I only need to fill in PRR in Box 8 and explain my situation in Box 56 as additional information? Do I need to provide any proof such as sales agreement of the property? 2. I have about GBP1,000 overseas bank interest for year 2022/2023. I need to declare it in SA106. 3. For the split year treatment, I need to fill in SA109. Please advise if the above understanding is correct. Thank you very much.

Hi Chrisitne Sung

You also need to complete boxes 1-7 on the SA108. You dont need to provide any proof at this time.  
2. yes you show this as foreign income for the UK part of the year  
3. yes you need to complete SA109 to show split year.
Please note though, a paper return is now classed as late and you will need to file online using 3rd party software to avoid any penalties - Self Assessment commercial software suppliers

Thank you