Measuring the profits (particular trades): land: trading transactions: badges of trade
You should consider the established badges of trading and in particular the following:
- 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  59TC381. You should remember that no one factor is determinant. What you are seeking to establish is the overall ‘character’ of the transaction.