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HMRC internal manual

Business Income Manual

Measuring the profits (particular trades): land: trading transactions: supervening trade: limited development

Development of infrastructure alone (for example, the division of land into plots, the construction of access roads and the installation of mains services) is not sufficient to demonstrate the appropriation of land, previously acquired as a capital asset, to stock in trade. Such development is ambiguous as it can point to the preparation of the land for sale. Accordingly, you should obtain more evidence before arguing that a supervening trade has begun. Such development merely enhances the value of the capital asset: The Hudson’s Bay Company Ltd v Stevens [1909] 5TC424.