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Trading Income or Capital Gain

A Builder who has been self employed for many years buys two properties, renovates them and sells them for a profit.
Should this be treated as trading income
or Capital Gains?

Mark Gosling


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By ACDWebb
03rd Nov 2003 13:43

Quite probably
you would need to look at intention and have some really good reasons why they should not be treated as trading income bearing in mind his trade.

If (as it sounds) the properties were bought, renovated and sold in quite a quick space of time I should think it far more likely to be trading than capital.

As has been said before, "Do the numbers". you might find that you get a better result with a trade anywway.

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