The distinction between trading in land and treating land as a capital asset is not clear cut and has been tested in the courts many times. 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 companies and partnerships, for individuals see B5.218A. For cases where trading in land has not been found see B5.217.
In James Hobson & Sons Ltd1 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 Oliver2 a partnership of builders built or purchased 58 houses over a period of years and sold 17 of them.
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