Capital Gain Tax for my sole residence

I came to the UK via the British National (Visa) scheme. It was approved on 2 June 2022. I made a trip to the UK and stayed temporarily in a hotel from 27 July 2022 to 13 September 2022. My objective was to stay long enough to feel about the country, rather than a short trip that would feel like a tourist. I wanted to use this as an opportunity to decide whether I did want to come to live in the UK for good. I made my final move on 15 December 2022. But between 15 December 2022 and 31 January 2023, I stayed at a hotel. I finally moved into my current rental flat under an Assured Shorthold Tenancy agreement on 1 February 2023. I also started to pay council tax on 1 February 2023. Information regarding CGT: My main residence in Hong Kong was bought in 2002/2003 and sold in 2022. It was transferred (with the final payment made) to the buyer on 30 November 2022. The residence was jointly owned by me and my mother. But my mother only put my name as the legal owner of the property for convenience and the property was paid for by her in entirety -- including downpayment and all mortgage payments. I did contribute to the running of the house -- occasionally the utilities bills, but mainly in the form of repairs/maintenance, buying daily necessities or household items. Question #1: I understand that legally I am responsible for 50% of the capital gain tax for the sale of the property, if any. But given that this is my sole and only residence--not only in Hong Kong but also anywhere in the world, my understanding is that I am exempt from paying capital gain tax? Am I correct? Proofs that it's my sole/only residence: - I did spend time working (and renting) a flat where I worked outside of Hong Kong but I do return to Hong Kong whenever I have at least 3 days of holidays and I always went back to this residence to live. - I have taken a picture of the mail sent to me by my hospital to this address. - I have taken a picture of one of the water bills registered under my name. - I have taken a screenshot of the voter's registration record in May 2022 -- this was also used as proof of where I lived when I applied for the BN(O) Visa. Question #2: For Tax Year 2022/2023, I would like to apply for split-year starting from 1 February 2023 when I finally moved into a more permanent home in the UK (not a hotel) for which I also started to pay council tax. So for this reason, I also do not need to pay capital gain tax for the above residence which was transferred on 30 November 2022? Question #3a: My mother gave me her legal 50% of the money from the sale of the property (note: but in reality the entire 100% should have been hers given that I have not contributed to the purchase of the property at all — when she purchased it, I just graduated from university and could not possibly afford to buy a flat) as a loan for me to look for a house/flat to purchase in the UK. Since this is a loan, her 50% share from the property sale (given to me as a loan) is not taxable? Question #3b: Given that I did not want to have cash flow of such a huge amount in my bank account, I put the money from the sale of the property (including my mother’s loan of her 50% portion) in time deposit (so that the money is not readily transferrable in case of hackers hacking my bank account or fraudsters trying to steal money from my account, etc.), is the savings interest from this time deposit taxable? If yes, then I assume it’s 50% of the saving interest from the time deposit since 50% is a loan from my mother's share from the property sale?

Hi isa,

1. For working out any gain, please refer to guidance at HS283 Private Residence Relief (2023).  
2. If claiming split year and your start date in the UK is after 30/11/22 when the property was sold, there would be no UK CGT to pay  
3a. the capital (loan) is not taxable    
3b. yes any interest received is included in your taxable income, it will be all the interest and not just 50% as the account is in your name
irrespective of how the funds were placed there.

Thank you.

 

Thank you. My Question #1 is actually: "But given that this is my sole and only residence--not only in Hong Kong but also anywhere in the world, my understanding is that I am exempt from paying capital gain tax? Am I correct?" According to your guidance for "HS283 Private Residence Relief (2023)", the disposal of main/sole residence is exempt from capital gains tax if all of the conditions are met and I have met all the conditions: HS283 Private Residence Relief (2023): https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2023 //However, you’ll be entitled to full relief where all the following conditions are met: the dwelling house has been your only or main residence throughout your period of ownership you have not been absent, other than for an allowed period of absence or because you have been living in job-related accommodation, during your period of ownership the garden or grounds including the buildings on them are not greater than the permitted area no part of your home has been used exclusively for business purposes during your period of ownership. Working from home using a room that is also used for non-business purposes will not prevent entitlement to full relief // Therefore, whether I claim split-year or not, I do not need to pay capital gains tax because: 1) Private Residence Relief for main/sole residence that has met all the conditions listed in HS283 Private Residence Relief (2023); 2) My final move to the UK is after I have disposed of the property (30 November 2022) in mid-December 2022.

Hi.

As confirmed in HS283, the disposal of an individual's main/sole residence - regardless of the residence's location - is exempt from capital gains tax if all the conditions are met.
Based on the information you have provided, you have met all the conditions.
You are therefore entitled to full Private Residence Relief and no CGT is payable. 
Take a look at  HS283 Private Residence Relief (2021)

Thank you