TC09530 - [2025] UKFTT 00566 (TC)

Fecha: 22-May-2025

with a view to its … starting to carry on a trade, …” The issue in dispute

(c)

with a view to its … starting to carry on a trade, …”

The issue in dispute

20.

The Respondents have not sought to challenge the company’s status as a “trading company” by arguing that, as a matter of principle, the activity of making a profit from the re–development of a single property cannot amount to a trade. On the contrary, they have accepted that:

(1)

the activity of making a profit from the re–development of a single property can amount to a trading activity; and

(2)

that is the case regardless of whether the person in question re–develops the property itself and then sells the property at a profit or obtains planning permission and sells the property at a profit to a third–party developer at a price reflecting that planning permission has been obtained.

21.

We agree. It is clear from the extensive case law in relation to what amounts to a trading activity as distinct from an investment activity, including the so–called “badges of trade”, that, as a general proposition, the purchase of a single property with a view to profiting from the re–development and sale of that property can be sufficient to amount to a trade.

22.

Instead, the Respondents’ challenge to the company’s status as a “trading company” in this case is founded on two alternative bases.

23.

First, they say that the activities of PSSL during the relevant period were not “trading activities” because they were not activities carried on:

(1)

in the course of, or for the purposes of, a trade being carried on by it;

(2)

for the purposes of a trade that it was preparing to carry on; or

(3)

with a view to its starting to carry on a trade.

24.

Secondly, they say that, in any event, even if PSSL did carry on activities falling within one or more of the categories described in paragraph 23 above during the relevant period, its activities during that period also included, to a substantial extent, activities other than activities falling within one or more of those categories.