Nick Wright examines the boundary between property investment and property trading, the badges of trade, and the risk areas where HMRC may seek to reclassify an investor as a trader.
The distinction between property investment and property trading drives the income tax, capital gains tax, inheritance tax and loss relief consequences of a disposal.
This article sets out how HMRC approaches the question, the badges of trade, and the key situations where reclassification risk arises in practice.
