Sunday, October 6, 2019

Business Tax Essay Example | Topics and Well Written Essays - 1750 words

Business Tax - Essay Example on, whether an activity is considered as trading or non-trading depends on the specific facts of different cases as provided in the badges of trade (, 2015). In this regard, this paper states the general rules relating to how HMRC determines trading and applies them to interpreted different transactions in different scenarios. The badges of trade aid in deciding whether a transaction after review, is a trade or non-trade for the application of corporation taxes. The first of the badges of trade is the profit-seeking motive which states that with evidence that the sole intention of purchasing an asset is to re-sell at a profit and not holding it as an investment leads to the conclusion that trading has occurred or is being carried on (Great Britain & Hodge, 2013). The implication of the profit-seeking principle is not that a profit-seeking objective should definitely mean a trade is being carried on but that this motive should be weighed with the other factors provided in the badges of trade. For an example of a case law, Salt v Chamberlain (1979) case concerned losses that had been made by an individual in the transaction of buying and selling quoted securities with a motive of making profits. In that case, the prosecution asserted that the evidence that an individual is engaged in transactions involving speculative dealings in the stock market is considered as carrying on a trade (Great Britain & Hodge, 2013). In this case, the claim was that all the other badges of trade were present but the General Commissioners and the court declined to disturb the findings indicating that they were not trade transactions (, 2015). This case implied that the motive of seeking profit is a question of fact that and is not determined by the professed intentions of the person and in most cases it is inferred from the surrounding situations. The second badge is emphasized on the number of the transactions and states that repeated and systematic transactions

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.