ICTA88/S776 cannot be used to catch straightforward transactions
of purchase and sale of land that do not amount to a trade, or
adventure in the nature of trade.
That is, the Section is not an alternative to Case I in
simple transactions of purchase of land by a UK resident person,
and its sale by that person to an unconnected person. This is the
case even if there has been some construction on, or development
of, the land before sale.
ICTA88/S776 is not applicable because the necessary avoidance
of tax is not present. In such circumstances we stand or fall on
the basic trading principles (see
BIM60000 onwards). If they apply we
assess any profit under Schedule D Case I. If they do not apply
then, by definition, the transaction is not a trading transaction
and we cannot argue that Schedule D Case I tax has been
avoided.
