Financial Factors In Cape Brandy Syndicate Vs IRC (1921)

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Register to read the introduction… This was blended, bottled and sold to over 100 separate buyers over a period of about 18 months. They were held to be trading. Per Rowlatt. J. They had “...bought it with a view to transport it, with a view to modify its character by skilful manipulation, by blending with a view to alter…”
In IRC Vs Livingstone (1972), a syndicate purchased a cargo vessel with a view to converting it into a steam drifter and selling it at a profit. They had never previously done this, but they were held to be trading!

Circumstances giving rise to the Realization
If a taxpayer sells an asset in order to raise money to help solve some financial problems it will be difficult to prove that he is carrying on a trade. Incidentally, there have been few cases on this point.
In Page Vs Pogson (1954) the taxpayer built a house for himself and sold it six months later after completion. He then built another one but had to sell it when his employment moved to another part of the Country. He was held to be trading by the Commissioners of Taxes.

In addition to the six badges of trade there additional factors which have to be taken into account. These are:

Taxpayer’s other circumstances
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The Way in which the asset was acquired
If the asset was acquired by inheritance or by way of gift the transaction may not be considered to be a trading transaction.

Method of

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