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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 ..... is plan they proceeded to put into effect, acting 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,080 5s. 0d. including profit of the difference between the £ 4,723 3s. 0d. paid for the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respectively; that is to say― Case I.―Tax in respect of any trade not contained in any other Schedule........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 assessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d come to this conclusion, there is authority as to what constitutes relevant material. Thus, Leeming v. Jones [1930] 15 Tax Cas. 333, was the case of an isolated 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. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars. It is true that the phrase used by Lord Buckmaster, a transaction "isolated and alone," does not apply; nor the language used by Lord Dunedin (at page 359) that "there was no evidence 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 tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion on the whole case. It has been laid down that the transaction must be judged by ascertaining how far it consists of and is governed by the ordinary incidents of trading. There are obvious features 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 fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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