B5.218 Cases where trade in land was found
It was explained in B5.211 that a land dealer, particularly in the case of an individual, may at the same time be the holder of investments in land. But there is no doubt that when the purchase and sale of land is carried out by a person whose business is closely connected with dealing or development, there is more likely to be a finding that the transaction was by way of trade.
Where a speculative builder, who contemplated retiring, bought an area of land for a farm, but later for health reasons abandoned the idea and resold the land at a profit, the General Commissioners decided that the profit arose in the course of his business as a speculative builder and that he was assessable accordingly. The court upheld the General Commissioners' decision, which was probably influenced by the fact that the appellant subsequently bought two other pieces of land in the neighbourhood, one of which he had sold1.
In another case a builder and property dealer contracted to purchase some land for £37,500, and completion of the purchase was effected by a company formed by himself and two other persons for the purpose. The price at which the company agreed to buy was £50,000. It was held that £12,500, representing the surplus due to the appellant on the transaction, should be included as a receipt of his business2.
Where a property-dealing company jointly promoted the formation of a development company to purchase and develop