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HMRC internal manual

Business Income Manual

Measuring the profits (particular trades): land: trading transactions: private residences

The fact that a dwelling has been used as the person’s residence is not automatically fatal to a trading contention: MacMahon and MacMahon v CIR [1951] 32TC311.

However, to succeed in a trading argument in these circumstances, it is necessary to demonstrate that residential use was incidental to that person’s primary objective which was to dispose of it by way of trade.