B5.213 Land dealer and also investor—company or partnership
For the statutory provisions relating to offshore property developers and their UK profits arising from a trade which involves either dealing in or developing UK land, see B5.255. The provisions in this article relate to case law and HMRC Guidance.
In James Hobson & Sons Ltd v Newall1 a building company built houses for sale or to let. After the war the company decided to sell houses which had been let and of which vacant possession could be obtained. It was held that the building of houses to let was as much a part of the company's trade as the building of houses for sale, and that the company was assessable in respect of profits arising from sales of let houses.
In Oliver v Farnsworth2 a partnership of builders built or purchased 58 houses over a period of years and sold 17 of them. All houses not sold soon after erection were let. A house built and since let to several tenants was sold. The taxpayers contended that their practice had been to retain a number of houses, including the one in question, as investments. The General Commissioners decided that the surplus on the sale of the house was a taxable profit and the High Court held that there was evidence on which the decision could be reached.
In Seaward Brothers v Varty3 a building partnership did contract work mainly, but when there was no such work, built