LDLA HK_UK

Hello, I would like to confirm whether the private residential relief is applicable for overseas properties whilst they were the main and only residence. My wife and I live in Hong Kong and live in a property owned by my wife which has made a gain. I am a UK citizen and have been in Hong Kong for over 5 years. My wife is a HK citizen and never lived in the UK. Scenario 1): We plan to relocate to the UK in the near future. I would like to know if the property will attract UK CGT if we sold the HK property after we move to the UK . From reading the content on your website, it would appear we can claim private residence relief for the duration we lived in the property as our main residence. Gains after this would attract CGT subject to the relief provided for the last 9 months before the sale date. Scenario 2): If we were to let our current home in HK for a period of time before we move to the UK and subsequently sold it after moving to the UK. Would the following be correct: a) Private residence applies from the purchase date until the date we vacate the property. The property value on the date we vacate would be the market value b) CGT would be chargeable on any gains from the moving out date in (a) subject to the relief provided for the last 9 months before the sale date. c) Prior to the sale, UK income tax would be payable on any rental income generated after we relocate to the UK regardless of whether the funds are transferred to the UK or remain in HK (on the assumption that we do not use the remittance basis). I also believe we may be able to apply the 3 year exemption which is available for any reason giving us a potential 3 years and 9 months grace period where CGT would not be applicable in both the scenarios above. I would be grateful if you could confirm my understanding is correct. Thank you in advance for you help.

I would like to enquire about residency status surrounding the temporary non-resident aspect. My situation: 1) UK Citizen, submitted split year return for 19/20, leaving date 10 Aug 19 2) In full time employment Oct 19 until 31 Jul 23 in HK 3) 22/23 tax year, spent 97 days in UK 4) 23/24 tax year, spent 110 days in UK 5) Until 31 Jul 23, clear that I met the “Automatic Overseas Test” as fully employed 6) From 1 Aug 23 been unemployed but still living in Hong Kong 7) 24/25 spent 60 days in the UK Looking at the residency test criteria, I: 1) Fail the Automatic Overseas Test in 24/25 as I have not been employed, last working day in HK 31 July 23 2) Fail the Automatic UK Test as I have a home overseas (in HK) and spent more than 30 days in 24/25 3) Meet 2 of the Substantial Ties Test a. Available home, spent more than 16 days with parents b. 90 day test, been in UK for 90+ days during either of previous 2 tax years (22/23 & 23/24) 4) I don’t have family members in UK relevant for the family ties test and have not worked 3+ hours per day for 40+ days in UK during 24/25. I believe therefore that I am still non-resident. Question 1: By meeting 2 of the Substantial Ties Test, am I correct that I can spend up to 120 days in UK during 24/25 without becoming UK resident? I have a potential situation where I may go over 120 days (below 183) during 24/25, not yet confirmed Question 2: If I was to enter the UK on 15 Oct 24 until end January 25 around 160/170 days in UK: 1) Does this make me UK resident for the full 2024/2025 tax year or, being less than 183 days, can I submit a split year return, return date 15 Oct 24 and be non-resident from 6 Apr 24 to 15 Oct 24 and UK resident from 16 Oct 24 to 5 Apr 25? 2) If I can submit a split return, does my return date of 15th October 2024 ensure that I have been out of the UK for longer than 5 years (10 Aug 19 to 15 Oct 24) and be outside the Temporary Non-Resident framework? Thank you in advance for any guidance provided.

Hello, I would like to confirm whether the private residential relief is applicable for overseas properties whilst they were the main and only residence. My wife and I live in Hong Kong and live in a property owned by my wife which has made a gain. I am a UK citizen and have been in Hong Kong for over 5 years. My wife is a HK citizen and never lived in the UK. Scenario 1): We plan to relocate to the UK in the near future and I would like to know if the property will attract UK CGT if we sold the HK property after we move to the UK . From reading the content on your website, it would appear we can claim private residence relief for the duration we lived in the property as our main residence. Gains after this would attract CGT subject to the relief provided for the last 9 months before the sale date. Scenario 2): If we were to let our current home in HK for a period of time before we move to the UK and subsequently sold it after moving to the UK. Would the following be correct: a) Private residence applies from the purchase date until the date we vacate the property. The property value on the date we vacate would be the market value b) CGT would be chargeable on any gains from the moving out date in (a) subject to the relief provided for the last 9 months before the sale date. c) Prior to the sale, UK income tax would be payable on any rental income generated after we relocate to the UK regardless of whether the funds are transferred to the UK or remain in HK (on the assumption that we do not use the remittance basis). As a connected item. If we were to buy a home in the UK to move into as our main residence (before we sold the HK property), we would need to pay the additional (3%) higher rate of SDLT and, if the purchase was whilst we are classified as non-resident a further 2% SDLT could be payable. I understand we can claim back the 2% non-resident SDLT if my wife or I spend 183 days in the UK during a 365 day period starting from 364 days before completion and 365 days after. I would like to know if we are able to also claim back the 3% higher rate SDLT if we sell the HK property within 3 years of buying the UK property. The assumption is that the UK property would then be our main residence. For clarity, we currently own 2 properties in the UK (in my name) which are let to tenants, one of which used to be my main residence before moving to HK. I would be grateful if you could confirm my understanding is correct on the 3 items I have listed. Thank you in advance for you help.