Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
As my old boss was wont to say it doesn't alter the price of cheese. You will be liable for Capital gains tax (CGT) on the gain made on disposal less your non cumulative Annual Exempt Amount (AEA) of 11.1K plus Lettings relief (LR) up to 40K if you occupied the flat either before or after the letting period. Irrespective of how the capital sum is paid the CGT liability crystalises at and in the tax year of disposal. The interest forms part of your income for Income Tax (IT) also.
I am so sorry to have to give such gloomy news.
Sorry, it would not make the slightest bit of difference.
Thank you for your support.