An individual, who had previously been employed as a commodities trader, left his employment and began dealing in commodities on his own account. The buying and selling of commodities would normally be liable to capital gains tax, unless the individual carries out sufficient activity to constitute trading. The individual made losses and claimed loss relief under ITA 2007, s 64 in respect of trading losses against general income. The Inland Revenue rejected his claim on the basis that the commodity transactions did not constitute trading; and even if they did, they were not carried out on a commercial basis, so that the effect of ITA 2007, s 74 was that no relief was due.
It was held by the Special Commissioners that the transactions were not sufficient to constitute a trade and, therefore, no relief for trading losses against general income was available. The facts of the case meant that it was very close to the borderline with regard to the definition of a trade, and it was noted that because of its lack of commercial organisation, it did not constitute a trade.