General principles for determining whether shares held as stock in trade or capital assets.

Characterisation of shares as stock-in-trade or capital asset determines whether sale proceeds qualify as business income.

Determination whether shares are stock-in-trade or capital assets turns on the totality of factors: the purchaser's intention (notably intention to resell at a profit), repetition and scale of transactions, and whether sales are so connected with carrying on the taxpayer's business that resulting surpluses constitute business income. Contexts where dealing in securities is integral to the ordinary business, or where regulatory practices require holding liquid securities, weigh in favour of classification as business income. Accounting labels are relevant but not conclusive.