BIM20240 - Meaning of trade: badges of trade: repeated transactions - later transactions reflecting on first
In deciding that a particular transaction is part of a trade it is permissible to take into account later transactions of the same sort.
For example, in Leach v Pogson [1962] 40 TC 585 an individual who had been assessed on his profits from setting up and selling driving schools claimed that the profit from the sale of the first school was a capital profit and not assessable to Income Tax. Although the individual had no intention of setting up a trade of establishing and selling driving schools when he set up his first school, he did so intend by the time he came to sell that school.
»Ê¹ÚÌåÓýapp court agreed that the Commissioners were entitled to take into account the many later transactions in deciding the nature of the first.