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TMI Blog1945 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ting in concert. There were three plots of undeveloped building land, adjoining one another, at West Tarring in the County of Sussex. Each of them proceeded, on 25th October, 1935, to buy one-half of those adjoining plots for 4,875. About a week after those purchases were completed, namely, on 4th November, each of the two respondents gave to his spouse his share of the building land so acquired. Each of these two ladies so became owner of one-half of the total building site. The next step in the pre-arranged plan was that these two ladies should sell the land to a building company, of which their respective husbands were the only directors and in which each held one-half of the issued shares, for 7,375. And this, acting on their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... half share of the land to the original owner and the 3,080 5s. 0d. which it fetched on the sale by the wife in question to the company. And here again the Crown claims that this profit of about 3,350 is liable to tax in the same way as the above sum of about 2,500. The Commissioners have found as a fact: (i) that when they sold their lands the ladies were beneficial owners, and did not hold them as nominees or trustees for the respective husbands; (ii) and have determined that the profits do not attract income tax. I take the first of these findings to mean that they were not colourable transactions, but genuine gifts to the wives of the lands and of the profits which could immediately be realised by selling them to the designat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..Case VI.―Tax in respect of any annual profits or gains not falling under any of the foregoing Cases, and not charged by virtue of any other Schedule; and subject to and in accordance with the rules applicable to the said Cases respectively. In Section 237 there is a definition of trade, which is as follows: 'Trade' includes every trade, manufacture, adventure or concern in the nature of trade. I should also read Rule 16 of the General Rules which is: A married woman acting as a sole trader, or being entitled to any property or profits to her separate use, shall be assessable and chargeable to tax as if she were sole and unmarried: Provided that―(1) the profits of a married woman living with her husband shall be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted transaction, the purchase of an option with the sole object of turning it over again at a profit. It was ultimately sold at a profit. So much the Commissioners found as a fact, but did not find whether there was an adventure in the nature of trade. This they were told to find, and to do so after considering what had taken place in the way of organising the speculation, maturing the property and disposing of the property. As a result the Commissioners found there was not an adventure in the nature of trade and were upheld unanimously in the Court of Appeal and the House of Lords. In the House of Lords (at page 357) Lord Buckmaster said: Were the respondent a company promoter or were his business associated with purchase and sale of esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to show that the respondent had done anything like this before, or was likely to do it again. Here everybody concerned did it twice. And there was, therefore, some evidence that the ladies were anyhow engaged in adventures or concerns in the nature of trade. Moreover, Mrs. Davies had had previous experience of selling, parcel by parcel, houses given to her by her husband. The fact is there were elements in the evidence pointing to the fact that the ladies were, and also evidence pointing to the fact that they were not, engaged in trade. Thus, in the case of Davies, the respondent had on previous occasions given his wife property, meaning landed property and securities, apart from the above-mentioned transactions. The main argument o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tures of this case which differ from ordinary trading. The analogy of a criminal conspiracy was used by the SolicitorGeneral, in which it is not necessary that every conspirator should appreciate the whole design. It is enough, he says, if he carries out the part allotted to him in carrying out that design. But at least the conspirators must agree to forward the criminal object. I am concerned here not with the motives or conduct of the husbands, but only those of the wives who are alleged to be trading. Here the wives accepted each a present from her husband, and at that stage no one can possibly suggest that the receipt of this present can possibly constitute trading. That leaves only the fact that the wives sold the property back t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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