In the case of Rutledge v CIR – CS 1929, 14 TC 490, on returning to the UK, from a business trip to Germany, the taxpayer sold the sole consignment of toilet rolls that was purchased in Germany to one individual for a profit. The court ruled that: a. An adventure in trade. The case was decided on the fact that the purchase was not made for own use or investment purposes. It is not the existence of profit that makes it a trade but the motive to earn a profit. b. The profit made on this single purchase was minimal and hence this was not considered a trading activity. c. There was no motive to earn a profit hence this was not a trading activity d. This was a capital transaction which was not subject to income tax.
In the case of Rutledge v CIR – CS 1929, 14 TC 490, on returning to the UK, from a business trip to Germany, the taxpayer sold the sole consignment of toilet rolls that was purchased in Germany to one individual for a profit. The court ruled that: a. An adventure in trade. The case was decided on the fact that the purchase was not made for own use or investment purposes. It is not the existence of profit that makes it a trade but the motive to earn a profit. b. The profit made on this single purchase was minimal and hence this was not considered a trading activity. c. There was no motive to earn a profit hence this was not a trading activity d. This was a capital transaction which was not subject to income tax.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In the case of Rutledge v CIR – CS 1929, 14 TC 490, on returning to the UK, from a business trip to Germany, the taxpayer sold the sole consignment of toilet rolls that was purchased in Germany to one individual for a profit. The court ruled that:
a.
An adventure in trade. The case was decided on the fact that the purchase was not made for own use or investment purposes. It is not the existence of profit that makes it a trade but the motive to earn a profit.
b.
The profit made on this single purchase was minimal and hence this was not considered a trading activity.
c.
There was no motive to earn a profit hence this was not a trading activity
d.
This was a capital transaction which was not subject to income tax.
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