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HMRC internal manual

Business Income Manual

Meaning of trade: badges of trade: intention - dual motive transactions

Transactions that are equivocal may also be dual motive transactions. A dual motive transaction is a transaction entered into with two objects.

An example would be an acquisition of land both to provide accommodation for an existing trade and for eventual development and resale at profit. It would be for the Commissioners to decide as a question of fact in such circumstances whether one of those motives was a trading motive and, if so, to what extent it coloured the whole transaction as being, in essence, a trading transaction - see Nourse LJ’s comments, for example, in Kirkham v Williams [1991] 64TC253.