Foreign Income and Split Year Treatment

Hi, HMRC Admin I have some questions regarding Tax Return for 2022-23 financial year after reviewed the guidance and the forums in HMRC. We would be appreciated if you could provide your professional advices. Here is the rough time frame of my case: - 30 June 2022: Sale agreed for home in Hong Kong and collected the first deposit (last deposit made in December 2022) - 15 October 2022: Property rental started in UK - 31 October 2022: Last working day for Hong Kong employment and on annual leave until early December (contract end date in December) - 10 November 2022: Landed in UK - 29 November 2022: Collected November salary for Hong Kong employment - 5 December 2022: Contract of Hong Kong employment ended and I did not have any work neither in UK nor overseas since this day - 12 December 2022: Collected last salary for Hong Kong employment - 22 December 2022: Collected last deposit of the sale of Hong Kong home Here are my questions: 1) I took annual leave from 1 November until my Hong Kong employment contract ended on 5 December 2022. In the middle of the leave period, I landed in UK. I received November salary on 29 November 2022 and my last salary payment (December salary and contract end gratuity) for the Hong Kong employment on 12 December 2022. That means I was on leave and no work was carried out in UK but the employment contract was still valid after I landed UK. I paid income tax to the Hong Kong SAR government for all salary mentioned. Shall I report the November and December payment for Tax Return 2022-2023 in UK? 2) If the answer is yes for question 1, I am going to apply for split year treatment. The start date of UK part should be 10 November 2022. Am I correct? 3) If the answers are yes for question 1 and 2, shall the November and December salary be reported in proportion (i.e. 1-9 November treated as Hong Kong part; 9 November – 5 December treated as UK part)? 4) Further to question 3, the December salary included a two-year contract end gratuity. Shall it be reported in proportion or in full? 5) According to the “Foreign notes”, I have to report foreign employment income with “Employment” pages. But on “Employment” pages, there are no boxes specifically for foreign employment income. Shall I fill in the foreign income in Box 1 and the employer’s name in Box 5 only (Box 6-20 are not applicable to me) and report claim for the foreign tax paid with “Foreign” pages? 6) Regarding the capital gain for the home in Hong Kong, sale agreement was made in June but the last deposit was received after we landed in UK. According to my understanding on the “Private Residence Relief”, we do not have to pay tax for the capital gain if the property (Hong Kong home) was sold within 9 months we landed in UK. Am I correct? Do we need to report this property sale if this non-taxable? Thank you very much. 

Hi,

The salary payements were for work carried out while you were resident in Hong Kong.  These salary payments will not be taxable in the UK.  If split year treatment applies, it would start from the date you arrived in the UK.  The tax return supplementary page SA102 Box 1, is for the amount of overseas employment income converted to pounds sterling.  You would also show the foreign employment page (SA106) income and tax deducted (in pounds sterling).  The completion date of the sale of the property was while you were resident in Hong Kong.  Any gain arising from the disposal would not be taxable in the UK.

Thank you.