Meaning of trade: badges of trade: funding from an existing trade
The purchase of the asset may be made out of the resources of an existing trade the person is already carrying on. This may indicate that the purchase is by way of trade. In particular, if when the asset is sold the proceeds are introduced to the main business and the needs of the business suggest that the funds would have to be returned there within a limited period. That is, that a sale of the asset was contemplated from the beginning.
On the other hand, the facts may show that the funds for the purchase were obtained from the realisation of an investment and that the taxpayer was merely changing investments.
In Harvey v Caulcott  33TC159 the court did not consider that the payment of the sale proceeds into the existing business was significant. It could not offset a finding that the asset had been an investment from the beginning.