Trading is a question of fact and each case stands or falls on
its own facts (
BIM60020).
There are many decided tax cases but a limited number of
principles (
BIM60160).
The focus point is the person’s intention at the moment
of acquisition of the land. You must be able to demonstrate an
intention to trade (
BIM60030).
You can argue that there was an intention to trade even if
this is denied, provided you have sufficient evidence. This may be
found in the presence of the 'badges of trade' (
BIM60025).
A trading transaction is a 'deal' rather than an investment (
BIM60040).
The importance of establishing all the relevant evidence is
paramount (
BIM60015).
Where the dispute proceeds to a contentious hearing, the
Commissioners' decision is normally final (BIM60020).
It is never possible accurately to forecast what the
Commissioners' decision will be.
Whether a loss making transaction is a trading transaction is
determined by applying the same principles as for profitable
transactions (
BIM60085).
Land transactions can give rise to difficult taxation
problems. You can be sure that the uncertainty you feel about the
'correct treatment' of a transaction, and likely outcome of a case,
will be shared by the other party concerned.
If the purchase and resale is
not a trading transaction the disposal must give
rise to a capital receipt and cannot therefore be assessed, for
example, under Case VI of Schedule D (Leeming v Jones [1930]
15TC333).
