Ravi Brady is 67 years old and is employed as a VAT specialist by Maple Leafs plc, a large professional services firm.  He is married to Anushka Brady; Anushka is 69 years old and retired recently.  Both Ravi and Anushka are UK resident for income tax purposes.

 

Ravi owns an investment portfolio of tangible and intangible assets; he is also a keen collector of sports memorabilia.

 

Following Anushka’s recent retirement, Ravi intends to retire on 5 April 2021.  He and Anushka plan to acquire a retirement home in Brisbane (Australia).  To help to finance this acquisition, Ravi will make a number of disposals from his investment portfolio and collection of sports memorabilia. 

 

Which of the following disposals would be exempt or wholly relieved from capital gains tax in 2020/21? Note: more than one of the disposals may be exempt or wholly relieved from capital gains tax.

 

A.        Sale of Ravi and Anushka’s principal private residence (i.e. their main residence), a house in London (UK).  The house is owned jointly by Ravi and Anushka and was acquired in 1993

B.        Sale of corporate bonds issued by Bruins plc, a marine services company that operates in the UK naval engineering sector.  The bonds are held in an investment Individual Savings Account (ISA) (also known as a ‘stocks and shares’ ISA)

C.        Sale of an investment property, a house in Durham (UK).  The house is owned jointly by Ravi and Anushka.  Neither Ravi nor Anushka have ever lived in the house

D.        A cricket bat used by MS Dhoni, former captain of the India national cricket team, in the 2011 ICC Cricket World Cup Final.  Ravi acquired the cricket bat for £11,000 and has agreed to sell the bat to another collector of sports memorabilia for £40,000.  The cricket bat has a predictable useful life of more than 50 years.

Answer rating: 100% (QA)

ANSWER C Sale of an investment property a house in Durham UK The house is owned jointly by Ravi and ... View the full answer