There are exceptional circumstances where a trader may enter into a ‘bet’ in the course of trading activities. An example would be where the ‘bet’ is used to hedge the interest rate on a loan for the business.

The cases of Down v Compston [1937] 21TC60 and Burdge v Pyne [1968] 45TC320 show that to be taxable, betting wins must come from the carrying on of the trade not merely from an opportunity presented by a trade.

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