The question whether a purchase is made with a view to resale at a profit is an important one in establishing whether a trade is being carried on, especially where there is no intention to retain the asset in question as an investment. This must, however, be taken into consideration alongside all facts of the situation generally, the existence of a profit-seeking motive is not decisive in the matter of trading as can be seen from the details of the cases set out below.
In Sherrington1 the First Tier Tribunal rejected the appellants' claims for loss relief, on grounds that they were not carrying on a trade with a view to profit and that, even if that were not the case, the activities were not carried on on a commercial basis. The individuals had entered into derivatives contracts with a Seychelles company (P) which betted on the level of the FTSE 100 at specified dates in the future, funded by interest-free loans from a Delaware company. These loans were repayable either if and when the appellants
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