有關利得稅(badges of trade)

1. 我不再重覆之前回答six badges of trade definition in Yahoo Knowledge.

2. There are different gain whether they constitute trade. For disposal gain of real property, you can refer to tax cases in HKG CIR v Sincere Insurance and Investment Co. 1973 in which an insurance company owns real property. 陳小姐的例子similar to HKG CIR v Sincere Insurance case, where Sincere Insurance carries on trade as an insurance company but sold three properties. The conclusion is the gain from selling these threeIn summary, there are five factors:-
a. Length of holding;
b. Nature of properties;
c. Source of funding to buy these properties;
d. Circumstances of realisation;
e. Purpose of realisation (where the proceeds used and why disposal happen);
These five factors need to be considered individually as well as a whole to determine whether trade is carried out. No single factor is conclusive.
陳小姐在a, c, d and e above show that the disposal 20 million is to realize profits (as the selling prices of all flats must be higher than the costs paying to the contractor) from selling some of the stock-in-trade flats to pay for the construction costs. It does not matter whether the purpose of the remaining flats are for her own used or not as the whole building has dual purpose (own-used and sale for profit). It is quite likely that 陳小姐 will be concluded as carried on trade for selling properties and therefore subject to profits tax for the 20 million transaction.