If the owner-disposer is a company, the presumption of profit-making motive and the exclusion of the personal enjoyment rationale may render the disposal somewhat more likely to be treated as a revenue transaction. The answers to the above will collectively build up a case for the transaction being treated as either capital or revenue in nature. what his main occupation or vocation is and whether this is related to his art-collection activity.how the potential buyer/s came to know about his paintings.how he finances his collection activity.whether he has sold any painting prior to this, and if so, how many and how often.how many paintings he owns and why he collects them.Determination of whether the gain is capital or revenue in nature will depend on a number of factors including the following: In 2016, he sold a painting he acquired in 1998 from a then struggling artist, making a gain of RM200,000. Mr Art-Lover collects paintings, carvings and manuscripts. In this respect, the nature of the asset may throw light on whether one or more of the badges of trade are involved. If the owner-disposer is an individual, it is pertinent to consider whether the asset has been acquired, developed or held for personal enjoyment. When the above assets are disposed of or otherwise dealt with (such as exchanged, donated, gifted or bequeathed), the question arises as to whether the gains (actual or deemed) are revenue or capital in nature to the owner-disposer. These include goodwill, reputation, brand names, patents, software, intellectual property and franchises.
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