BIM60025 - Land: Trading transactions: Badges of trade

The established badges of trading are relevant. You should consider particularly:

• whether there have been any previous transactions and, if so, at what intervals;
• whether the way in which the transaction was organised was typical of a land dealer;
• whether a loan was necessary to fund the purchase and, if so, on what terms;
• the character of the land: was it amenity land for the purchaser, suitable for long term investment or ripe for immediate development?
• the length of time the land was held and, particularly, whether there might have been, at the moment of acquisition, a pre-arranged sale.

The badges are summarised in the property dealing context in Marson v Morton and Others [1986] 59TC381. You should remember that no one factor is determinant. What you are seeking to establish is the overall 'character' of the transaction.