Commentary

B1.405 Number of transactions

Business tax
Business tax | Commentary

B1.405 Number of transactions

Business tax | Commentary

B1.405 Number of transactions

Series of transactions

The fact that there have been repeated transactions of the same kind may help to corroborate that the transactions are of a trading nature. HMRC's view is that 'although an isolated transaction can amount to a trade the systematic repetition of a transaction is a pointer towards trading'. The advice1 continues:

'Where there is more than one transaction involved, the case for trading will be much stronger if the pattern appears to be a series of related transactions occurring at not too great intervals of time, and presenting the appearance of habitual and continuous activity.'

The frequency and number of transactions is of especial significance in cases where the subject matter of the transactions is commonly used as both investment and trading stock, for instance land2 or stocks and shares. For instance, in Emanuel (Lewis) & Son Ltd v White3, the company appealed against a decision of the Special Commissioners rejecting its claim for loss relief under what is now ITA 2007, s 64. The question at issue was whether, during those years in which the company made losses in respect of which it claimed relief under that section, the company carried on the trade of dealing in stock exchange securities in addition to its trade as a fruit merchant. It was held by Pennycuick J (reversing the decision of the Special Commissioners) that, having regard to the number and size of the purchases and sales and to the rapid and continuous turnover, the only

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