B5.218A Case summary for trading in land and also investor—individual
The following is a summary of cases where the taxpayers were found to be investors as well as trading in land — these cases relate to individuals, for companies and partnerships see B5.218B.
In Harvey1, the appellant, a builder, built a number of shops on a site of which he was the leaseholder. He sublet two shops to his wife as his nominee, and they were transferred from his business accounts to his private accounts. The shops were later sold. He had also bought a house for his foreman to live in, which was similarly sold. He was assessed under former Schedule D Case I (trading income) in respect of all these transactions. The General Commissioners dismissed his appeal, but their decision was reversed in the High Court. Donovan J stated:
'… the man is a builder. That no doubt puts a peculiar onus on him, to show that the profit from the sale of some property is profit from an investment, or profit from something which is not trading stock. That onus is not incapable of discharge.'
In Bradshaw 2, the appellant, a builder, transferred his business to a company, but did not transfer 206 houses which he had erected and had let. When some of these houses were sold, the surpluses were assessed on the appellant under former Schedule D Case I (trading income) on the footing that the building