Revenue’s update on what constitutes a trade

Feb 22, 2021

Updates to the Tax and Duty Manual Part 02-02-06 – What constitutes a trade? – include additional material on the case of Noddy Subsidiary Rights Company Ltd v CIR 1966 [43 TC 458].

The manual details that the Noddy case, often quoted as an authority in favour of the proposition that the mere ownership of an asset and receipt of royalties can be a trade, requires evidence of a high degree of activity associated with trying to promote the brand, seeking out and evaluating licensees and of dealing with third parties. Further details of the case are included section 2.2 of the manual.

The summary of opinions in Appendix B has also been updated. See eBrief no. 029/21 for further details.