Overseas Property Sale under the Tax Treaty

Dear HMRC Administrators, I am writing to seek your advice regarding your recent letter stating that "your circumstances mean you need to complete a tax return" for the year 2021-22. I have been a UK resident for the past 10 years; however, my domicile is in Japan. Given that I did not receive any significant dividends or interests during this period, the only matter of relevance might be the property in Japan, which I inherited in 2015 and subsequently sold in 2021 following the passing of my mother, who had been residing in the property. Referring to the UK-Japan Tax Treaty Article 13, which states that "Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 of this Convention and situated in the other Contracting State may be taxed in that other Contracting State," I assumed my obligation to report and pay taxes to Japan. I sought advice from a Tax accountant, who thought that this would only be chargeable in Japan. Accordingly, I made the tax payment in 2022 under their guidance. However, after reading some posts and considering the HMRC letter mentioned earlier, I am now uncertain whether I might also be obligated to report this to HMRC. This has led me to the following questions: **Question 1:** Am I required to report the income associated with this property sale to HMRC, despite the UK-Japan Tax Treaty Article 13? If so, could you please clarify which forms I need to submit? Would it be the SA100, SA108, and SA106 forms? **Question 2:** Based on a rough calculation of the tax I may owe in 2021-22 using the calculator provided at https://www.tax.service.gov.uk/calculate-your-capital-gains/resident/properties/, I have found that the tax I paid to Japan was approximately £3,000 more than the UK-based estimation. Does this imply that I have overpaid my taxes? **Question 3:** In the specified period, my other capital incomes amounted to less than a total of £1,000 (interest and dividends). However, I also incurred Capital losses (about £3,000) due to trading stocks in a US brokerage account. Should I report both the interest and dividend incomes (which are below the allowance) and the Capital losses in SA108? Thank you very much for your consideration and assistance in advance. Kind regards,

Hi
You will still need to declare the sale/gain in the UK.
However, foreign tax credit relief can be given in respect of the Japanese taxpaid.
This is limited to the amount of UK tax that is applicable to this source of income.
When completing the return you will show all your income.
For the capital losses, if they occured this year, they must be shown in the return and used the same year, even before the annual exempt amount for capital gains.
If they are from a previus year, as long as HMRC have been notified of them within 4 years of them arising, you can choose to use them this year or carry forward.

I am a BNO visa holder since 2021. I entered Scotland on 15 July 2021 for study in the university. I worked in Macau before and owned a property since 2008. I lived in there for a while and rented it out in 2013. I sold it by Jan 2022 when I was in Scotland. I would like to know will I be liable for capital gain tax. I used the principal money for repayment of an uk mortgage in Feb 2022. Then by 2023, I deposited the rest of the money (the profit/gain) into my uk global account under HSBC. Shall I register my tax return for the above case if I am liable to declare in my self assessment for tax return given that I still have a permanent residence in Hong Kong and consider myself domicile in Hong Kong still.

Hi howard hui
Please refer to :
Paying tax on the remittance basis (Self Assessment helpsheet HS264)