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HMRC internal manual

Business Income Manual

Measuring the profits (particular trades): land: trading transactions: deal or investment?

In practice, it will be rare for someone to say that they are starting a trade in property. Intention may be reasonably inferred from all the circumstances at the time. If you identify the badges of trade in a transaction, these will indicate a trading intention.

It is necessary to examine the transaction objectively. Do the facts suggest a ‘deal’ or an investment?

If, notwithstanding the purchaser’s stated intentions, the facts suggest a trading intention it should be argued that the transaction is part of a trade.