Words and Phrases - "ordinary course of the trade"
General Motors Acceptance Corp. (U.K.) Ltd. v. I.R.C.,  BTC 324 (HC), aff'd  BTC 71 (C.A.)
In the ordinary course of trade of a finance subsidiary ("GMAC"), it provided a financial package to car dealers, which entailed (1) GMAC purchasing a vehicle from its manufacturing affiliate on the same terms as if the dealer had ordered the vehicle, (2) GMAC providing the dealer with an option to purchase the vehicle, and (3) GMAC in the interim charging a "handling fee" to the dealer in order to recover its interest expense and a profit. It was found that "although cars was not what [GMAC] was trading in, in the ordinary course of selling its financial package, it would, inevitably, be involved in the sale of cars [as a consequence of the dealers' exercise of their options]. So, in the ordinary course of its trade as a financial dealer, it sold the cars, even though it was not out of such sales that it made its profits".
Reed v. Nova Securities Ltd.,  BTC 121 (HL)
As interpreted in General Motors Acceptance Corporation (U.K.) Ltd. v. IRC,  BTC 71 (C.A.).
Shares acquired by the taxpayer did not constitute trading stock (which was defined as "property such as is sold in the ordinary course of the trade") because they were worthless, and thus unsaleable. Lord Templeman stated (at p.127): "If a company is to acquire an asset as trading stock, the asset must be not only of a kind which is sold in the ordinary course of the company's trade but must also be acquired for the purposes of that trade with a view to resale at a profit. A company which acquired an asset for purposes other than trading would not, in my opinion, acquire the asset as trading stock even though the company habitually traded in similar assets."