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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Measuring the profits (particular trades): land: trading transactions: acquisition and disposal of superior interest: approach

The basic trading principles apply in determining whether a tenant’s acquisition and resale of a superior interest is a trading transaction. Common features of such transactions are prearranged or early sales and funding of the purchase to be reimbursed from the proceeds of sale. Such transactions merit close scrutiny to see whether a trading argument is appropriate.