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It may be that the nature of the asset is a strong indication of trading or of a venture in the nature of trade. This is particularly so when considering the distinction between investments and trading stock. If the sole advantage of possession is the immediate prospect of realisation there is a strong inference of trading. The cases of Fraser¹ (see B1.405) and Rutledge² (see B1.404) are also relevant in this context.

Some assets have a strong presumption of investment. This is so where the asset produces income, or yields some pride in possession (such as a painting or a classic car). Note that the significance of income-production is diminished if there are costs attached to the retention of the asset (for instance, interest on capital used for the purchase). Similarly, it is well-recognised that some investments may be specifically designed to produce capital growth rather than income³.

It would also be unusual for the sale of plant or machinery which has been utilised in an established trade to be considered