SolvedBIM60001 | Measuring the profits (particular trades): land: trading transactions: introduction
From HM Revenue & Customs · Business Income Manual
Land is capable of being either a investment or trading stock. Accordingly, the problem of distinguishing between capital and revenue transactions is more difficult and has greater consequence.
The question of whether a transaction of purchase and sale of land is a trade, or the acquisition and disposal of a capital asset often arises.
Two common situations are:
where there is no existing land dealing or building trade and it is claimed that the transaction is therefore a capital transaction,
where there is an existing land dealing or building trade and it is claimed that the transaction is outside that trade.