Every case is decided on its own facts, but if you buy a house and garden and live in it and much later, subdivide the garden to build a second house, and then sell one of the houses, I think you're safe enough.
At one extreme, if you see a promising development site, buy it, develop it and sell the development, that's highly likely to be seen as an adventure in the nature of a trade.
At the other extreme, if after your eleven children have flown the coop you find the house you've lived in for 30 years is bigger than you now require, so you carve off a part of the garden, build a little bungalow on it and then sell off the big house, that's not going to be an aventure in the nature of a trade.
In between those two extremes, there's a whole host of possible permutations and combinations of facts. You didn't buy the site — you inherited it. You bought land to enlarge your farm, changed your mind and decided to sell it (but not before building a wee house on it, because why not?). You built the house for your old granny to move into, but didn't she die just as it was finished, so you decided to sell it. The site is part of your garden, or it isn't. The site is adjacent to land that you retain ownership of, or it isn't. Etc, etc.
The issue is decided based on the totality of the facts, and the facts can be infinitely varied. Hence, expert professional advice is needed. But, in general
- if you bought the site intending to exploit it for economic activity of some kind, or
- if you built a house inending to monetise it by selling or renting it,
then if you sell the finished house, it could well be regarded as an adventure in the nature of a trade. But if you have owned the land for yonks, or bought it for a non-economic purpose, and you didn't build the house to monetise it, but circumstances change and so you sell the house, then it's less likely to be adventure in the nature of a trade.
